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Companies have a number of options to coordinate donation efforts
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Before Hurricane Harvey unleashed its devastation on Texas and Louisiana, Federal Emergency Management Agency (FEMA) Administrator Brock Long said, "People need to be the help before the help arrives." With Hurricane Irma now threatening Florida and the East Coast, the need for hurricane-related relief doesn't stop with Harvey.
If your company has employees who were impacted by Harvey—or who are affected by Irma in the coming days—you may be thinking about how you and your nonimpacted employees can "be the help before the help" for those impacted employees. Insurance and FEMA monies take time, and not all losses will be covered. You may have employees who want to donate to their colleagues and are asking the company to coordinate their efforts. Even if you don't have employees impacted by Harvey, Irma or other disasters, you may be thinking about what your company could do if something like this does happen to your employees.
[SHRM members-only platform: Disaster Prep & Recovery on SHRM Connect]
A simple and direct option for employers to provide aid to impacted employees is to pay
qualified disaster relief payments (QDRPs). In general, the Internal Revenue Service (IRS) is highly suspect of gifts from employers to employees. In the wake of the September 11 terror attacks, QDRPs were created to provide a clear income tax exclusion for employer-funded relief payments to victims affected by federally-declared natural disasters and other catastrophes.
This means that an employer can quickly provide cash payments to affected employees to help them deal with the immediate aftermath of a disaster while also sparing the employee from being taxed on those payments. Importantly, these relief payments are generally deductible business expenses for employers.
However, with all good things come some bad, and as with most situations involving the IRS, there are important requirements and conditions that employers must consider before providing relief payments to employees.
What if an employer wants to supplement its own relief efforts by facilitating donations from employees unaffected by a disaster? Unfortunately, this is where things get more complicated. There are a number of options available, but they may not offer the kind of quick solution disaster relief often requires.
[SHRM members-only HR Q&A: Business Continuity: What is the best way to plan for disasters that may affect our business?]
Low-Cost Ways to Help Affected Employees
Maybe your company was heavily impacted by Harvey and you are not in the financial position to make donations to employees and/or are without the administrative resources to set up a donation platform. There are no-cost and low-cost ways you can also
help your impacted employees right now:
The need for quick action in disaster situations understandably often prompts a "Ready! Fire! Aim!" response, but hasty actions can have unexpected consequences for both employers and employees. The good news is that there are viable options available to concerned employers, both to facilitate donations from employees, to fund relief payments, and to provide other help to affected employees through existing benefit plans and programs.
Aimee E. Dreiss is an associate attorney and Timothy G. Verrall is a shareholder in the Houston office of Ogletree Deakins, and Eric D. Penkert is an associate attorney the firm's Greenville, S.C., office. © 2017 Ogletree Deakins. All rights reserved. Reposted with permission.
Related SHRM Articles:
Florida Employers: Wage and Hour Considerations and Hurricane Irma, The SHRM Blog, September 2017
IRS Lets Retirement Plans Make Loans, Distributions to Victims of Hurricane Harvey,
SHRM Online Benefits, August 2017
Hurricane Harvey and the FMLA: Are Your Employees Eligible for Leave During a Natural Disaster?,
SHRM Online Benefits, August 2017
Houston Employers: Wage and Hour Guidance and Hurricane Harvey, The SHRM Blog, August 2017
Related SHRM Resources:
SHRM Connect Group--Disaster Prep and Recovery
Hurricane Harvey Resource Page
Hurricane Irma Resource Page
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