With hurricane season upon us, employers are justifiably concerned about the potential impact of a natural disaster on their business. A hurricane, natural disaster, or any other crisis in the workplace can bring a business to a screeching halt and devastate the lives of a business’s most valuable asset, its employees.

To minimize the impact of a natural disaster, employers should have plans in place before disaster strikes, including, for example, a crisis management plan, a communication plan, and a disaster response and recovery plan. These plans must take into account the effect a catastrophe may have on workers and include ways to help impacted employees return to work as soon as practical to ensure continued productivity at the workplace following a natural disaster. Any enacted plan should consider the application of relevant federal and state laws to ensure compliance and avoid any employment-related lawsuits or any agency enforcement action following a natural disaster. Continue Reading Planning for a Catastrophe

We first published this article in the Louisiana Employment Law Letter the month after Hurricane Katrina. We republished it following last year’s catastrophic flooding in Louisiana and are publishing it again now in the wake of Hurricane Harvey, as we believe its advice is timeless and as cogent as ever in the aftermath of any natural disaster.

A crisis in the workplace, whether the result of a natural disaster, terrorism, workplace violence, or other conflicts, can bring your business to a screeching halt and devastate the lives of the employees who are essential to your business’ existence. It’s only natural for business owners and managers to think immediately of the economic loss such a disaster can cause, particularly because the loss of a business usually translates into the loss of a livelihood for owners, managers, and employees. Your plan for responding to and recovering from a crisis must take into account the effect it will have on your workers and the ways you can help them become productive again, even in the face of personal loss.

Follow these guidelines to help your employees cope with the catastrophe and return to productive employment:

  • Communicate with employees as soon as possible after a disaster. When disaster strikes, your employees may suffer the loss of their personal possessions, homes, friends, and family. Even a temporary inability to return to work can compound any sense of loss or emotional trauma your employees may experience. Locate and contact your employees immediately after a disaster, and tell them the company’s status and plans. If employees know what’s expected of them and what they can expect from the company, they can take the company’s plans for them into consideration when rebuilding their personal lives. For example, if a leave of absence, relocation, or layoff is inevitable, employees should be told as soon as possible so they can plan accordingly. Don’t leave them in the dark about their employment.
  • Keep the company’s leadership visible, and stay firmly in charge. Let employees know who is in charge of each aspect of your response or recovery efforts—and what those efforts are. You might lose loyal and valuable employees if they sense the company is disorganized or lacks leadership and a plan for the future. Don’t react rashly or without thinking through all your options—for example, calling for a facility closure or mass layoff may not be the most economical or practical response to a disaster. That isn’t to say that the company’s leaders and management can’t show emotion or compassion, or make mistakes. Your employees know you aren’t superhuman, and they’ll respect you for acknowledging and correcting your mistakes. But restoring order and direction will give them the confidence to stick with the company and work together while it responds to and recovers from the disaster.
  • Give managers and supervisors the tools they need to help employees cope with the effects of a workplace crisis. Don’t forget that your managers and supervisors are the people who deal directly with your employees. Educate them about the possible effects of a crisis or disaster on employees and how to spot indicators of emotional or behavioral conditions that need attention. You may need to hire a consultant to meet with your managers and supervisors, or you might take advantage of free booklets and services provided by the government or private relief organizations. At a minimum, your managers and supervisors should know to refer affected employees to an employee assistance program (EAP) or HR for the identification of other sources of professional assistance.
  • Cut employees some slack. That doesn’t mean you should replace order with chaos, but you should treat employees fairly and with compassion when it comes to getting things back on track. Your employees will likely need some time to get their personal lives in order, whether they need to grieve for loved ones, make housing or financial arrangements, or seek medical attention. Revisit your leave policies and benefits to determine whether the nature of the crisis warrants a revision or extended leave or benefits. Make sure you apply your policies uniformly, and avoid jumping to conclusions if an employee misses work, makes a mistake, or just doesn’t seem herself. Natural disasters and other crises can adversely affect your most unflappable superstar, so consider EAP referrals or other benefits if an employee appears to be slipping in his performance or behavior. You don’t have to lower your standards, but you should understand that it might take some time and assistance for employees to fully recover.
  • Help employees tend to their personal affairs so they can regain their productivity. Employees often have to spend a great deal of time during business hours getting their personal lives back in order after a disaster. For example, they may need to meet with or talk to benefits providers, claims representatives, bank officials, medical professionals, attorneys, and so on. Consider setting aside time during the day for employees to use the telephones for personal business matters, or consider inviting representatives and/or consultants from insurers, EAPs, legal aid organizations, and crisis management services to meet with employees at scheduled times. You might even set aside an office with a telephone and Internet access to allow employees to take care of private personal matters during breaks. The sooner your employees get their personal lives in order after a crisis, the sooner they can get back to business as usual.
  • Get involved in community relief efforts, and allow employees to participate. If the disaster or crisis is one that affected others outside your workplace, consider becoming involved in relief efforts and allowing employees to participate. Becoming productive again and helping others can be rewarding and therapeutic for employees and can help the economy. You might organize a blood drive, volunteer services after hours, or contribute to relief funds. Becoming part of a larger response and recovery effort will help employees put their personal losses into perspective.
  • Develop or update your disaster response and recovery plans. Finally, take the time to develop a disaster response and recovery plan if you don’t already have one, or update your plan with any lessons learned from your own experience.

For more information, please contact H. Mark AdamsJennifer L. AndersonVeronica Rivas-Molloy, and Stephanie M. Gilliam.

On October 3, 2016, under Notice 2016-55, the IRS will announce that employees won’t be taxed when they forgo vacation, sick, or personal leave in exchange for employer contributions of amounts to Section 170(c) charitable organizations providing relief to Louisiana storm victims. Notice 2016-55 will also provide that employers may deduct the amounts contributed as business expenses.

Leave-based donations. Some employers have set up or may be considering setting up programs where employees can donate their vacation, sick, or personal leave in exchange for the employer making cash payments to qualified tax-exempt organizations that provide relief for the victims of the August 2016 Louisiana storms.

Tax treatment. In Notice 2016-55, the IRS will announce that it will not assert that cash payments an employer makes to Section 170(c) organizations in exchange for vacation, sick, or personal leave that its employees elect to forgo, constitute gross income or wages of the employees, if the payments are:

  1. Made to the Section 170(c) organizations for the relief of victims of the Louisiana storms; and
  2. Paid to the Section 170(c) organizations before January 1, 2018. Nor will giving employees the choice to participate cause employees to be considered in constructive receipt of income.

It should be noted that employees who participate in a leave-sharing donation program won’t be allowed to claim a charitable contribution deduction for the value of forgone leave excluded from compensation and wages.

As for employers, the IRS has provided that it won’t assert that payments made under a leave-sharing donation program are deductible as charitable contributions under Section 170, rather than as business expenses under Section 162.

Finally, it should be noted that a written disaster leave-sharing plan is required in order to take advantage of the above-referenced IRS leave-sharing pronouncements. Specifically, a list of enumerated requirements must be met in order to be subject to the above-enumerated IRS leave-sharing program.

The Louisiana Association of Business and Industry (“LABI“) sent a formal request to U.S. Department of Labor Secretary Thomas E. Perez to request a delay in implementing the new federal overtime rule in the 22 Louisiana parishes that received a disaster declaration during last month’s historic flood.

The new regulation is scheduled to go into effect nationwide
on December 1.

We will continue to monitor the status of the request and post any updates as they occur.

This article was published in the Louisiana Employment Law Letter a month after Hurricane Katrina. In the wake of the recent catastrophic flooding in Louisiana, we believe its advice is as cogent as ever.

A crisis in the workplace, whether the result of a natural disaster, terrorism, workplace violence, or other conflicts, can bring your business to a screeching halt and devastate the lives of the employees who are essential to your business’ existence. It’s only natural for business owners and managers to think immediately of the economic loss such a disaster can cause, particularly because the loss of a business usually translates into the loss of a livelihood for owners, managers, and employees. Your plan for responding to and recovering from a crisis must take into account the effect it will have on your workers and the ways you can help them become productive again, even in the face of personal loss.

Follow these guidelines to help your employees cope with the catastrophe and return to productive employment:

  • Communicate with employees as soon as possible after a disaster. When disaster strikes, your employees may suffer the loss of their personal possessions, homes, friends, and family. Even a temporary inability to return to work can compound any sense of loss or emotional trauma your employees may experience. Locate and contact your employees immediately after a disaster, and tell them the company’s status and plans. If employees know what’s expected of them and what they can expect from the company, they can take the company’s plans for them into consideration when rebuilding their personal lives. For example, if a leave of absence, relocation, or layoff is inevitable, employees should be told as soon as possible so they can plan accordingly. Don’t leave them in the dark about their employment.

Continue Reading Crisis Management: Weathering the Storm