Will Your Business Survive a Disaster?


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You arrive at work the morning after a big storm . . .

Storm damage

So you say you’re just an employee, and business continuity isNot my job!”

Think Again. Your job is all about business continuity!

You should already know these statistics about businesses hit by a disaster:

  • If you can’t get the doors re-opened within 10 days, your business has little chance of surviving.
  • In fact, about 40% of companies hit by natural disasters never do re-open.
  • And for small businesses, the chances of going under are even greater because not only is the workplace damaged or destroyed, but local customers have been hit by the storm, too.

OK, those are statistics. But stick with the scenario a bit longer.

Big storm hits – and thankfully you get through unharmed. Your family is shaken, but safe and back together. Unfortunately, your workplace was leveled just like in the image above. So now, the real emergency begins, because . . .

If the business shuts down, how will you get paid?

If you’ve never really thought about it, here are some things to know that will make a difference to the answer.

  1. Are you paid on an hourly basis and eligible for overtime? Or are you “exempt” from overtime?
  2. How long is the business likely to be down?
  3. Can you work from home?
  4. Does your employer have an Employee Assistance Program (EAP) that will help?
  5. Do you have a personal retirement plan – 401(k) – that you could borrow from?

As you can imagine, answers to these questions may vary company by company, and state by state, but here are some general guidelines.

If you have questions, please do not rely on this Advisory; check with your employer for specific answers. (This Advisory should help you know what questions to start with!)

What your employer is required to do

According to the Fair Labor Standards Act (https://www.dol.gov/whd/flsa/), employers must pay covered non-exempt employees for hours worked, and overtime to those workers who work more than 40 hours in one week. So, if you work, expect to get paid. If you DON’T work because a disaster shuts down the business, don’t expect to get paid.

If you are a salaried employee, and the business is shut down for less than a week, you will probably get paid for that time. However, your employer may deduct those days from your leave bank. If the business is closed for a full workweek, your employer isn’t required to pay you.

If the workplace is completely destroyed from the disaster, you may be eligible for unemployment while you look for work or the company is being re-built.

If the company re-opens, but you can’t make it back to work because your own home has been damaged, or someone in your family has been injured, your absence is considered “a personal day” and it will be counted against your leave bank or deducted from your salary.

Your employer may have set up an Employee Assistance Plan (EAP) that in addition to referrals and counseling might provide short-term financial help – perhaps advancement on future wages. Note my use of the word “might” in that sentence . . .

What you may have to do

You may be called upon to work from home while the business gets back on its feet. If you can function from home, you’ll be compensated – either for the hours worked, for by the week. Questions to ask: “How will my work from home be monitored? Is there a minimum number of hours I’ll have to work to get paid?”

If your home or other property is damaged in the disaster, make an insurance claim as soon as possible. Your policy may be able to provide money for what are called “additional living expenses.”

If you have a 401(k) or other retirement plan, you may be able to get a hardship distribution or a hardship loan, with few penalties.

If the disaster is big enough

If the governor of your state requests and is granted “Disaster Relief,” your company may be eligible for special loans or grants from the government or Small Business Association. You and your family may be eligible for FEMA assistance, too. In both cases, there will be some delay before you get any money, and how you use the proceeds may be restricted. Be sure you know what you are signing up for!

Does your employer have more resources?

The guidelines we’ve listed here are minimums prescribed by the federal government. Your state may have other requirements.

And of course your employer may have more resources and be able to pay you a lot more than the minimums.

Still, if the disaster is big enough that the company goes completely out of business, your finances will very quickly be impacted, too.

What’s the best answer?

Of course, you can’t predict a disaster, but the more you and your company prepare, the better the chances you’ll make it through the disaster and get back up and running before it’s too late.

So, even if emergency planning isn’t part of your official job description, find out what your employer has done about it. It’s possible that you could help improve whatever plan exists.

We have resources right here at Emergency Plan Guide. Use the search bar to find specific topics, or click on Business Planning in the Build Your Survival Skills section of the sidebar to page through some of the recent Advisories specifically for business owners and employees.

And watch for more on this topic!*

Virginia
Your Emergency Plan Guide Team

 

*Our 2017 Simple Business Continuation Plan is about a week away from completion! If you’re a subscriber to the Advisories, you’ll be at the top of the list to get the announcement.

 

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