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Mission Critical: Disaster Planning and Payroll


No matter whether the disaster involves fires, earthquakes, hurricanes or snowstorms, there's a need for a comprehensive disaster plan.

Sometimes, the disaster is so pervasive, no work can be done at all. However, it may happen that employees can work remotely, even when the office can't be opened, which can last for days or even weeks. Anticipate how employees' hours will be tracked, how you will contact employees who may be working somewhere else and how workers are going to be paid.

Even if their homes haven't been damaged, workers may be understandably beleaguered during and after a disaster. Planning ahead for the catastrophic event will help everyone proceed.

  • Employees may not have access to electronic time-keeping systems or a time sheet, so plan to have a designated person clock the daily and weekly hours. Let employees know that if there's any way, you'd like for them to try to record any time spent working, so you'll have a record of the time in writing on the day the work is performed.
  • What about paychecks? If in paper form, the unavailability of a paycheck because of office closures could mean hardships for workers. The possible delay of getting a printed check is a good reason to make sure everyone is on a direct-deposit plan now.
  • What about if power goes out? You need to keep careful records of the reason for the payroll delay and inform employees in writing about the problem. If disasters prevent work hours from being recorded or pay from being distributed, the solution is to fix things and make them right as soon as practical. Find out whether the service providers have backup systems, especially if they're located in your area and thus may be affected themselves.
  • You've got compliance risk if nonexempt workers don't record their time. Attorneys say that despite the extreme circumstances, FLSA recording requirements can't be ignored. Nonexempt employees may have worked some after an evacuation, when they got to dry ground and a secure location, but may not know the specific amount of time worked. This is why being prepared in advance is crucial.

Considering the emotional cost

Beyond compliance, realize that being cheap and inconsiderate to employees when disaster strikes is penny-wise and pound-foolish. You'll generate a great deal of negative workforce morale and get the brush-off next time you need their help. It may be a good idea to be flexible on working from home for some weeks, even if your business hasn't done this before, to make it easier for your employees to take care of themselves and their jobs.

You are challenged to excuse certain absences and to allow continued remote work due to personal circumstances caused by the disaster. Remain focused on relationship issues and the workforce. This is an opportunity to show with your actions that the words "we value our employees" ring true.

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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation.The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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