Spotlight on Trends for Employee Assistance Funds in the Wake of COVID-19

Spotlight on Trends for Employee Assistance Funds in the Wake of COVID-19

Carolyn S. Berkowitz, ACCP

 

Researchindicates that 97% of large companies in America have some type of EmployeeAssistance Fund (EAF), and not surprisingly, EAFs have become a top priority forcorporate social responsibility (CSR) professionals in the face of the COVID-19pandemic. Whether employees or their family members fall ill, are furloughed orlaid off, or have other related hardships, corporations around the country arelooking to quickly leverage their EAFs as they focus a growing portion of theirCSR efforts inward.

Typically, anEAF is created to assist employees financially when they face an unexpectedhardship, e.g. high medical expenses, a funeral, or an uninhabitable home afterdisaster. Donations to the fund are made several ways: a one-time or periodic giftfrom the employer, fellow employee contributions, and sometimes throughfundraising activities. EAFs require a set of guidelines that govern the fundincluding criteria for who is eligible, the nature of allowable hardships, the maximumdollar amount, and the individual or group accountable for allocationdecisions. These are all carefully put in place when an EAF is created.

But in theface of this pandemic, corporations are seeking ways to be more responsive withtheir hardship funds. Over the past two weeks, ACCP has talked with CSR leadersfrom more than 100 corporations and heard from many about the steps they aretaking to quickly expand and/or streamline their EAFs.

Here are somecommon strategies we’ve heard that you may consider:

Increase Funding for an Existing EAF
Allocateexisting or expanded corporate contributions to the EAF

  • Allow employees to cash out their paid time off (PTO) and donate it to the EAF
  • Allow employees to donate stock to the fund
  • Allow employees to take voluntary pay cuts to support the fund

    ACCP member companies such as United Airlines, Southwest, Disney, Comcast and more, CEOs and/or other senior executives are taking pay cuts to support their employees, and many are also donating their pay differential to the company’s EAF. 

Change EAF Guidelines to EnhanceFlexibility

Expandthe parameters of EAF guidelines to make funds more accessible by:

  •    waiving a requirement for minimum time employed by the company,
  •    being more flexible about the definition and criteria for hardships
  •    changing the maximum grant limit in one of two ways – either increasing the dollar amount to provide more comprehensive support or decreasing the existing grant limit to assist a greater number of employees (using the federal government stimulus funding as a guide)

   Streamlinethe process for applying for and receiving funds:

o  Makethe application easier to find on the website or in HR packets, and create a lesscumbersome application form

o  Createa leaner decision-making process in order to act quickly

o  Determinethe possible needs of employees in advance and anticipate costs to meet thoseneeds, so allocations are easy to execute

o  Makepaid time off days an option for payout from the EAF or allow employees tocash-in their own PTO to self-fund

o  Usethe EAF fund as a “last resort” internally by making core business changesinstead, such as increasing the number of PTO days, and increasing hourlyworkers pay rate

Clearly Communicate with Employees Regardingthe Fund

·        Communicateclearly about the fund and the process for accessing it with affectedemployees. Because they may be distracted by current circumstances, be sure to provideextra assistance to those impacted.

·       Communicateregularly about the fund to all employees so they are aware they may donatedollars or PTO hours to their colleagues who are struggling.

One importantnote, corporate foundations cannot normally fund EAFs because that isconsidered a form of “self-dealing.” However, when a National Emergency isdeclared, some legal restrictions for corporate foundations are loosened,including an exception to the self-dealing rules. This exception now permits employer-sponsored private foundations to aidemployees or family members who are affected by the coronavirus, subject tocertain standards and requirements (Venable,CompanyFoundations and Coronavirus Response, March 18, 2020). This opens the corporate foundationto be another funding vehicle for the EAF. ACCP is developing member webcaststhat will further address this issue.

While it’snot ideal to establish an EAF during a time of crisis, it is possible to actmore quickly by partnering with a local community foundation on a donor-advisedfund (DAF). In this case, fund guidelines still need to be created and decision-makersappointed, but the fund can be created in a matter of weeks, rather thanmonths.

Here some resources on EAFs that mightbe helpful:

·        KPMG:Report on Providing EAFs

·        YourCause:Creating an Employee Assistance Fund

·        Venable:Company Foundations and CoronavirusResponse

We would loveto hear from you on ways you’re adapting your company’s EAF to meet youremployees’ needs right now. Please engage with our team either byposting in the ACCP Communities,or by emailing DanaFrazeur, to share examples of your work that can be instructive toothers. We will only attribute the example to your company if you explicitlyallow us to. 

If you are an ACCP member, join the conversation in the ACCP Communitiesfor the most up-to-date information, or you can access a compilation of ourmembers’ pressreleases to learn about what others are doing.

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