Research
indicates that 97% of large companies in America have some type of Employee
Assistance Fund (EAF), and not surprisingly, EAFs have become a top priority for
corporate social responsibility (CSR) professionals in the face of the COVID-19
pandemic. Whether employees or their family members fall ill, are furloughed or
laid off, or have other related hardships, corporations around the country are
looking to quickly leverage their EAFs as they focus a growing portion of their
CSR efforts inward.
Typically, an
EAF is created to assist employees financially when they face an unexpected
hardship, e.g. high medical expenses, a funeral, or an uninhabitable home after
disaster. Donations to the fund are made several ways: a one-time or periodic gift
from the employer, fellow employee contributions, and sometimes through
fundraising activities. EAFs require a set of guidelines that govern the fund
including criteria for who is eligible, the nature of allowable hardships, the maximum
dollar amount, and the individual or group accountable for allocation
decisions. These are all carefully put in place when an EAF is created.
But in the
face of this pandemic, corporations are seeking ways to be more responsive with
their hardship funds. Over the past two weeks, ACCP has talked with CSR leaders
from more than 100 corporations and heard from many about the steps they are
taking to quickly expand and/or streamline their EAFs.
Here are some
common strategies we’ve heard that you may consider:
Increase Funding for an Existing EAF
Allocate
existing 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 Enhance
Flexibility
Expand
the 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)
Streamline
the process for applying for and receiving funds:
o
Make
the application easier to find on the website or in HR packets, and create a less
cumbersome application form
o
Create
a leaner decision-making process in order to act quickly
o
Determine
the possible needs of employees in advance and anticipate costs to meet those
needs, so allocations are easy to execute
o
Make
paid time off days an option for payout from the EAF or allow employees to
cash-in their own PTO to self-fund
o
Use
the EAF fund as a “last resort” internally by making core business changes
instead, such as increasing the number of PTO days, and increasing hourly
workers pay rate
Clearly Communicate with Employees Regarding
the Fund
· Communicate
clearly about the fund and the process for accessing it with affected
employees. Because they may be distracted by current circumstances, be sure to provide
extra assistance to those impacted.
· Communicate
regularly about the fund to all employees so they are aware they may donate
dollars or PTO hours to their colleagues who are struggling.
One important
note, corporate foundations cannot normally fund EAFs because that is
considered a form of “self-dealing.” However, when a National Emergency is
declared, 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 aid
employees or family members who are affected by the coronavirus, subject to
certain standards and requirements(Venable,
Company
Foundations and Coronavirus Response, March 18, 2020). This opens the corporate foundation
to be another funding vehicle for the EAF. ACCP is developing member webcasts
that will further address this issue.
While it’s
not ideal to establish an EAF during a time of crisis, it is possible to act
more quickly by partnering with a local community foundation on a donor-advised
fund (DAF). In this case, fund guidelines still need to be created and decision-makers
appointed, but the fund can be created in a matter of weeks, rather than
months.
Here some resources on EAFs that might
be helpful:
·
KPMG:
Report on Providing EAFs
·
YourCause:
Creating an Employee Assistance Fund
·
Venable:
Company Foundations and Coronavirus
Response
We would love
to hear from you on ways you’re adapting your company’s EAF to meet your
employees’ needs right now. Please engage with our team either by
posting in the ACCP Communities,
or by emailing Dana
Frazeur, to share examples of your work that can be instructive to
others. We will only attribute the example to your company if you explicitly
allow us to.
If you are an ACCP member, join the conversation in the ACCP Communities
for the most up-to-date information, or you can access a compilation of our
members’ press
releases to learn about what others are doing.
Next up: Virtual volunteering