Reprinted with permission from What's Working in Human Resources; Article submitted by Debra T. Taylor,
Employment & Training Manager Louisiana Workers’ Compensation Corporation
Hurricane Katrina has brought out the best in many American companies - illustrating how the business community can mobilize when human need is greatest. But the storm also raised a difficult question: How do we cope with a disaster that could put us out of business temporarily or permanently?
The most important asset
HR's part: Juggling the obligations to the firm's most important asset - its people. That means another set of questions, like:
Will we have to lay people off?
- How will we handle company and FMLA leave policies?
- Can we afford to continue benefits like health care?
- Should we make alternate working arrangements, like telecommuting?
Some suggestions on coping with these scenarios:
It's entirely possible that after a catastrophe, a firm's revenue stream slows to a trickle, and you can't keep employees you can't pay. There are legal concerns, and such a move could come under the federal Worker Adjustment and Retraining Notification (WARN) Act, which requires employers to give 60 days' notice to workers likely to be laid off.
Even reductions in work hours - more than 50% each month for six months - can trigger the notification rules. There are exemptions from the rule, for things such as "unforeseen business circumstances" or natural disasters, so it's likely companies affected by Katrina will be exempt.
There are certainly a number of circumstances where other companies could be obligated under the Act. Another problem with layoffs: getting employees their final checks. The laws vary from state to state; California, for instance, requires workers to be paid within seven days of the end of the pay period. Other states allow up to 15 days.
You know how important it is to enforce employee leave policies uniformly, so it's a good idea to outline emergency rules in your company handbook. Some companies relax leave policies in emergencies, allowing employees extra time to take care of personal business. In some cases, unpaid leave might provide relief for a company in a cash-flow crunch.
Tough decision: Following a disaster, would your company maintain employee benefits? Health coverage is at the top of the list, of course. One hurdle: Most policies require a specific number of enrolled active employees. If your workforce is downsized, your company may not be able to meet the contract terms. If your company decides to terminate coverage - or employees become ineligible because they're no longer working - you'll have to coordinate the COBRA notification process.
Alternative work arrangements
Although some companies regard telecommuting as a special privilege, such an arrangement could be life support for a company whose physical plant is damaged or uninhabitable.
Some employers might even provide temporary shelter for key workers. That could become a dicey deal, however, if the IRS considers the housing costs as employee income.
How did the Louisiana Workers’ Compensation Corporation (LWCC) meet its human resources challenges?
LWCC is headquartered in Baton Rouge, Louisiana. Some of our employees were personally impacted by Hurricanes Katrina and Rita. While we made sure we complied with legal requirements, we also remained committed to doing the right thing for our employees.
LWCC provided hurricane-impacted employees up to 30 days of company-paid time to take care of restoration issues.
Baton Rouge's population doubled overnight due to Katrina's unkind impact on New Orleans. With this population explosion, everything seemed to take twice as long. For example, a 30-minute commute to work turned into a 60-minute commute, and there were long lines at the gasoline stations. Realizing the great impact the traffic conditions had on our employees, we allowed employees to work a 7-hour workday and paid them for an 8-hour workday. We provided this benefit for two weeks.
It will take a long time for things to get back to normal in Louisiana, but I rest assured knowing that LWCC offered support to our employees during these difficult times.