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How Employers Can Address Employees’ Financial Hardships, Wage and Income Loss, Medical Bills, and Other Needs Due to COVID-19

How Employers Can Address Employees’ Financial Hardships, Wage and Income Loss, Medical Bills, and Other Needs Due to COVID-19

Published 03-25-20

Submitted by America's Charities

Childcare. Utilities. Medical bills. To many of us, these are just typical, everyday costs of living and working. For others, these are a few common causes behind financial hardship, often forcing someone to choose between medicine, electricity, food, or shelter. In some dire situations, these can even be the make-or-break reasons that lead to someone becoming homeless.

The onset of the novel coronavirus (COVID-19), which has exponentially spread throughout the U.S. in just a couple of weeks, has only compounded these existing hardships, which employees nationwide have been grappling with for years.

With unprecedented ‘shelter in place’ and ‘social distancing’ restrictions enforced across the country, some individuals have found themselves suddenly jobless or temporarily living with drastically-reduced wages, whereas others are left figuring out how to continue working from home – while simultaneously having to care for their children or elderly parents.

As insurmountable and surreal as all of this seems, there is a solution companies can deploy to help their employees through all of this. It’s called an Employee Assistance Fund (EAF). Also known as an Employee Crisis Fund or Employee Hardship Relief Fund (it goes by many names), an EAF is a fund companies can set up to help employees and their families overcome financial hardships and emergencies.

In the last couple of weeks – even in just the last few days really – our team here at America’s Charities has seen a tremendous surge in employers reaching out to us about setting up an EAF. It has been overwhelming, in a good way. In a time with so many unknowns surrounding COVID-19-related health scares and the economy, it is uplifting to see the outpouring of companies who want to help health-care professionals, frontline workers, and the community through employee giving, and who truly care about their teams’ well-being and health.

All of this is inspiring, and we will continue to be here for employers who want to help their employees, and for employees who want to support nonprofits addressing all of these issues – especially as it relates to COVID-19 response efforts in the community.

With the uptick in companies reaching out to us about EAFs, there are some common questions and use-cases we’ve been hearing that we think should be addressed and clarified.

While an EAF can certainly be used to address a wide range of employee hardships, there are restrictions companies should be aware of.

“Many employers approaching us right now specifically want to set up an EAF as a way to replace lost income for those impacted by COVID-19. While an EAF technically does that, there are nuances on how it needs to be set up,” stated Jim Starr, president and CEO of America’s Charities.

Jim has personally been fielding many of the EAF requests that America’s Charities’ business development team has been swelled with recently. With the influx of EAF requests, I asked him if he could share some important things companies need to consider as they explore setting up an EAF, specifically as it relates to COVID-19.

Here are some highlights of what he had to share: 

  1. An EAF is Not to be Used to Replace Lost Wages. Some companies approaching us are in a challenging position where they have to lay off employees. Naturally, they want to do anything they can legally do to get money to those employees to replace lost wages. But an EAF cannot simply replace lost income. It CAN, however, be used to cover expenses that a person is unable to meet as a result of that income loss. For example, let’s say an employee has a loss of $2,000 in household income due to lost wages because of coronavirus. While an EAF can’t directly replace that income loss with a $2,000 grant, the EAF can provide a grant to cover rent or essential utility bills. For purposes of this example, let’s say those bills total $1,000. The company’s EAF can be used to grant a $1,000 for those bills. So, while the money granted through the EAF isn’t replacing the employees’ entire $2,000 income loss, it is helping mitigate wage loss and hardship by helping cover bills that employee no longer has income to cover. 
  2. An EAF Cannot Solely be Established to Provide Relief for COVID-19. An EAF cannot be established to provide relief for a specific event or disaster like COVID-19. It must be available for a category of events such as “Qualified Disasters” or “Financial Hardships.” A company could set up a category like “Qualified Disasters” (or presidentially declared disasters, of which coronavirus is one) through its EAF. In doing so, employees would be able to apply for assistance related to hardship caused by COVID-19, as well as any other presidentially-declared disasters that may occur in the future.
  3. An EAF Must Have a Charitable Class that is “Large.” There is no specific definition of what that is, so the way to meet that standard is to make the charitable class “indefinite” (open to current and future employees). Additionally, a company is welcome to include whomever they want in their charitable class, meaning they can include retirees, contractors, or even non-household family members of an employee.

These are just a few distinctions and requirements companies should keep in mind when exploring EAFs as a way to help employees through hard times – specifically as it relates to this coronavirus pandemic. Our team is happy to dive into details with your company and explore the best option for what you are trying to accomplish. And as our team continues to field an increasing demand for EAFs, we are humbled that you have reached out to us to assist you. Thank you, and hang in there. We are all in this together.

Ready to learn more and get started? Request a call!

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America's Charities

America's Charities

America's Charities inspires employees and organizations to support the causes they care about. We help nonprofits fundraise unrestricted, sustainable dollars through the workplace, and we help employers achieve their giving, engagement, and social impact goals. We do this to bring more resources to the nonprofits that are changing our world.

Who we serve:

  • Charities ­– We help charities fundraise recurring, unrestricted, sustainable dollars through the workplace. Click here for a printable list of our members.
  • Employers – We help employers achieve their giving, engagement, and social impact goals. Employers seeking to build or boost a strong culture; engage their employees and help them find purpose and meaning; attract, recruit, and retain talent; and ultimately achieve better corporate profitability and social impact, partner with America's Charities to launch or revitalize their workplace giving programs. We offer employers a suite of employee giving software packages, tools, and resources.
  • Employee Donors – Through our work with charities and employers, we inspire individual donors to connect with great causes, support nonprofits in a recurring, sustainable manner, and make a personal, social impact.

Core Services:

  • We offer a full suite of employee giving and engagement tools, including easy-to-use workplace giving technology platforms ranging from a straightforward, out-of-the-box option, to a comprehensive platform that integrates matching gifts, employee volunteering, cause campaigns, and more. Each of our solutions is tailored to fit an employer's specific needs and social impact goals, and deliver personalized, highly social online giving experiences.
  • We generate sustainable unrestricted financial support for member charities through the Combined Federal Campaign (CFC), state and local giving campaigns and private sector workplace giving campaigns.
  • We provide charitable funds management services to nonprofits and private and public sector employers while maintaining a resolute commitment to transparency and accountability.
  • We provide comprehensive consulting services with expertise in employee engagement, corporate social responsibility (CSR), workplace giving program and strategy development, benchmarking, analysis, and more.
  • We help companies support their employees in times of distress and hardship through Employee Assistance Funds (EAFs), also known as Employee Relief Funds or Employee Crisis Funds. By working with us, a company increases its flexibility around the types of hardships the fund can cover and lowers its administrative burdens.

Since 1980, our collective experience and ability to provide the highest level of personal service and expert consulting to our member charities and employer clients has resulted in more than $750 million for more than 25,000 nonprofits through federal, state and local government, and corporate workplace giving programs.

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