Emergency Pay: Planning for the Unexpected
When regular payroll services or providers are disrupted, an emergency payroll service provider could help enable continuation of your company's payroll distribution.
In light of recent global events, employers are doing all they can to maintain business continuity while supporting the needs of their employees. One critical component for employers and employees alike is maintaining their payroll processes without disruption. Emergency pay is one option employers should consider as a contingency, helping to ensure that employees get paid on time, and employers meet their legal obligations—even when the unexpected happens.
Companies that have established business resiliency and disaster recovery plans are better poised to maintain their operations. One of the key elements of those plans is establishing contingencies for when systems and processes break down—including payroll.
While no one could have predicted the kinds of disruptive events witnessed in early 2020, statistics demonstrate an anticipated increase in the frequency and severity of natural disasters worldwide that speak to the broader need for planning and preparedness. According to Climate.gov and the NOAA, there were fourteen billion-dollar weather disasters in 2019, tied for the fourth-highest total on record.
Incorporating Emergency Pay into Your Business Resiliency Plan
Emergency pay provides employers with a back-up to support their payroll process in a way that helps minimize disruption during catastrophic events like a natural disaster.
When regular payroll services or providers are disrupted, an emergency payroll service provider could help enable continuation of payroll for check, direct deposit and/or pay card-based payroll distribution.
The key, of course, is to identify an emergency pay provider that has adopted its own framework for disaster mitigation, preparedness, response and recovery, so they can be relied upon at a time of need.
That framework should include their own risk analysis and planning to include:
- Risk assessment and business impact analysis
- Business continuity planning
- Disaster recovery planning
- Health and safety planning
Digitizing Pay to Streamline Payroll Processes
One step that businesses can take proactively is to adopt alternative pay options like pay cards that can help reduce the amount of paper and physical handling required to pay employees. Pay cards can provide employers with a digital pay alternative that doesn't require employees to maintain a bank account to receive pay, make purchases, manage funds and monitor spending.
Maintaining Compliance in Challenging Times
Maintaining payroll to support employees in critical times can be a real challenge. So can ensuring compliance and meeting any applicable legal obligations related to employee compensation. Ensuring that emergency pay processes provide continuity for data, process monitoring and reporting may be crucial for regulatory compliance. It may also be critical to determining eligibility and securing tax credits when employers seek to take advantage of disaster–related government programs like the Coronavirus Aid, Relief, and Economic Security (CARES) Act, or other natural disaster-related legislation.
Getting Back to Business
Planning for the next unforeseen event doesn't stop when a crisis ends—it may reveal opportunities to improve and refine processes during times of normal operations as well as during a crisis. HR leaders can play an essential role in developing and maintaining a recovery plan that sustains a business through the best of times, while helping to see their organization through the unforeseen and unexpected.
The ADP SmartCompliance® Wage Payments Module offers a flexible, streamlined approach to providing traditional and electronic payment options.
- Launch this on-demand webcast anytime: Agile Payroll Practices to Support Your Organization During COVID-19
- Updated information for employers can be found here: ADP Employer Preparedness Toolkit — Coronavirus Disease (COVID-19)
- Get customizable email templates and in-depth information on direct deposit, recent legislation and other valuable topics in the COVID-19 Employee Communications Toolkit.