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46 Lab. & Emp. L. 1 (2017-2018)

handle is hein.journals/laboemplo46 and id is 1 raw text is: 


              FALL  2017
     Section of Labor and
         Employment  Law
American  Bar Association

'pIW  va

     DsaterReliof in the Workplace

Bk~y Virgi nia E,, IMcGarrity and  Alisha   P\0 Suivkan

In the aftermath of multiple natu-
ral disasters that have given rise
to a humanitarian crisis, employ-
ers are taking stock of the damage
and looking for ways to assist
employees affected by Hurricanes
Harvey, Irma and Maria. Human
resource management plays an
integral role in the workplace by
responding to these disasters and
assisting affected employees,
beginning with the benefits and
resources made available to them.

Retirement  Pan  Relief
Recent guidance issued by the IRS
provides employers who offer
qualified retirement benefits with
several avenues of support. See
IRS Announcement 2017-11, IRS
Announcement  2017-13, IRS
Announcement  2017-160. By relax-
ing procedural and administrative
rules that would normally apply,
plan sponsors of 401(k) plans,
403(b) plans, and 457(b) deferred-
compensation plans can make
loans and hardship distributions
to affected employees and family
members  who live or work in a
disaster area identified for indi-
vidual assistance by FEMA. Spe-
cifically, hardship distributions
can be used toward food and

shelter, and employers may defer
until a later date verification steps
employees would otherwise need
to satisfy to receive a hardship
distribution from their retirement
plan. In addition, employers may
waive any provision in the plan
that prohibits the employee from
making contributions for at least
six months after the hardship dis-
tribution. Although not required
to adopt this relief, an employer
may immediately begin making
loans or hardship distributions
before the retirement plan is for-
mally amended to provide these
relief features (plan amendments
must be adopted by December 31,
2018, for calendar year plans.)
The result is that affected employ-
ees are able to access their
money more  quickly and easily.

Leave-Sharing  and
Donation  Programs
Leave-sharing programs provide
employees with the opportunity
to donate their accrued PTO,
vacation or sick leave for the ben-
efit of other employees adversely
affected by a presidentially
declared major disaster. Gener-
ally, the recipient employee must
use the donated leave for

purposes related to the disaster
and cannot convert the leave to
cash. If more time is donated by
employees than is requested from
affected employees by the end of
the disaster period, the donated
time must be returned to the
donor employees (with excep-
tions for small amounts that may
prove administratively impracti-
cable to reallocate). If the plan is
in writing and carefully struc-
tured to meet certain IRS require-
ments, the donor employee is not
taxed and only the recipient
employee is taxed on the value of
amounts received.
  Employers looking for ways to
answer the call of employees

who wish to support relief efforts
may also consider adopting a
leave-donation program. Such
programs permit employees to
donate their unused vacation,
sick or personal leave time in
exchange for the employer mak-
ing a cash donation of equivalent
value to a charitable organization
providing relief to victims of the
disaster. See IRS Notice 2017-48,
IRS Notice 2017-52, IRS
Announcement  2017-160. While
donations of paid time off by an
employee do not allow the
employee to claim a charitable
deduction, if the employer makes
the cash payment to a charitable
             continued on page 10

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