Priority No. 1 for business recovery: the human factor
How can I afford to repair my home and replace all of my belongings? Where are we going to live now? How do I keep my children safe while the schools are closed? Am I going to lose my job?
Those are just a few of the issues that the employees of south Louisiana businesses are coping with in the aftermath of the recent floods.
That’s why helping employees recover must be the first step in any strategy for business recovery, says Bill Joubert, director of the Louisiana Small Business Development Center in Hammond.
“The employees: That is the key asset,” he says. “They’re scared, they’re under a lot of stress and anxiety, and they’re wondering, ‘Where am I going to live? Am I going to lose my job? What about my family?'”
Companies can begin to help their workforces through simple communication, Joubert advises. Let them know what your plan is for reopening, when they are expected to report back to work, how much leave time is available for dealing with their personal affairs, and whether you plan to continue paying them. In the absence of communication, he notes, employees may assume they’ve already lost their job and look for work elsewhere.
If possible, schedule regular meetings with the staff during restoration to communicate progress.
“Reach out and have a conversation,” Joubert says. “Email. Text. Let people know what the situation is. You must have absolute clarity with your employees, and any knowledge you have should be shared immediately, whatever it is. Keep them in the loop as plans and timelines develop.”
Once that is accomplished, business owners are urged to strategize services that might help their employees recover as quickly as possible, which, in turn, helps stabilize the community as well as the company, says Ines Pearce, manager of the U.S. Chamber of Commerce Foundation’s Disaster Help Desk for Business.
Employers might provide or help employees find reliable temporary housing or transportation. With many schools and day cares closed, parents of small children may have a difficult time returning to work. Providing on-site day care might make the transition possible. Flexible scheduling or telecommuting might also help employees to return to work at some level.
Companies facing closure for repairs for a significant amount of time can consider creative ways to maintain their workforce. Joubert recalls a CEO who, during a previous disaster, kept his employees on the payroll by hiring them to do the repairs.
Pearce also says managers should remain mindful of the mental health aspect, which is likely to take time to address. It’s during periods such as these when an Employee Assistance Program can be invaluable.
“Anyone who has lost their home, or is concerned about the well-being of a loved one, or suffered family loss, that’s a trauma,” she says. “People are so in go-go-go mode, they forget to take care of themselves. Encourage them to do so by talking with someone. A lot of it is just people needing to tell their story until they don’t need to tell it anymore. But those with more extensive trauma may need to go through crisis counseling and do more work. Businesses have to keep a sensitive eye toward that.”
Adds Joubert: “This is a time for a business owner to give back.”
Local attorneys offer insight into employee pay, ‘volunteer’ hours, leaves of absence, overtime and other post-disaster workplace legal issues
As the flood waters begin to recede, and south Louisiana begins to recover from the recent flooding, employers also face recovery issues, including how to address employee needs. Although there is no rule of thumb that applies to all situations, common sense, consistency and compassion can go a long way. Flexibility, understanding, and empathy for those who have been affected are key. Even employees who were not inundated with flood waters still may be dealing with losses sustained by family and friends. And still other employees likely have had difficulty even getting to work and navigating closed streets.
Attorneys A. Edward Hardin Jr., Erin Kilgore and Brian Carnie of Kean Miller law firm offer the following information on how the law may impact the way companies can address employee pay, “volunteer” hours, leaves of absence and other post-disaster workplace issues.
Impact on duty to pay employees: Pay issues will generally depend on an employee’s exempt status under the federal Fair Labor Standards Act, as Louisiana does not have its own minimum wage/maximum hours law. There are always exceptions, but if an employee is not an exempt employee under the FLSA, he or she must only be paid for time actually worked. However, time worked includes both hours worked at the employer’s place of business and any hours worked away from the office. If you let them work from home or remotely from a computer or smartphone, you still must pay them for their actual time worked. Accurately tracking worked hours (especially hours worked remotely) is critical.
Exempt employee salaries: Exempt employees must generally be paid their full salary for any week in which the employee performs any work. If your business is open and an employee misses work because he or she cannot get to work due to transportation difficulties, flooding issues, or even states of emergency/travel bans, that is generally considered an “absence for personal reasons,” and the employee’s salary may be docked, but only for full-days of absences during which the employee performed no actual work. Conversely, if the employer chooses to close the business for any reason for a portion of the work week, it must pay the exempt employee’s entire salary for that week (assuming the employee performed some work during that week). Remember: An employee who works for even part of a day will trigger the requirement to pay the exempt employee’s full guaranteed salary for that week where the reason for not working the remainder of the week was due to a business closure and not personal reasons.
“Volunteer” hours: If your business sustained heavy damage, many employees may offer to help rebuild and repair. The FLSA requires you to pay your employees for working time, even if they volunteer to donate that time or work for free. Businesses should be very cautious about having employees “volunteer” to assist during an emergency. The best advice is to pay for this time. Unless otherwise prohibited by law, contract or your own company policies, you have the option of paying your nonexempt employees at a lower rate of pay for clean-up/recovery work, but they must be paid at least $7.25 per hour to avoid minimum wage exposure. You also must ensure that you properly calculate their overtime pay if they work more than 40 hours in the work week, especially if they work at two different rates in the same week.
Leaves of absence: Employers may provide employees with periods of unpaid leave to address recovery efforts from the recent floods, but many employees will likely feel a financial strain by any extended periods of unpaid leave. Employers may consider allowing employees to take forms of employer-provided paid leave in lieu of unpaid leave. You must also consider whether affected employees are eligible for FMLA leave (such as the serious health condition of employee or employee’s child, spouse or parent) or even leave as a reasonable accommodation for employees who are physically or emotionally injured as a result of a catastrophe and their impairment qualifies as a disability under the ADA. An employee may not expressly request either form of leave, but employers must be attuned to circumstances and requests that may trigger follow-up with the employee. For example, if an employee’s absence is caused by the employee’s need to care for a family member who requires medical equipment that is not operating due to a power loss, that likely would be protected under the FMLA. In cases where employers provide employees with extended periods of leave, employers must also be cautious regarding the possibility that the leave may inadvertently trigger COBRA notice obligations.
Employee Assistance Professionals: Finally, in situations like this, when a distraught employee comes to an employer with a personal issue, employer-provided employee assistance programs are invaluable. Employers should not try to act as a counselor or mental health professional because an employer could run afoul of the ADA in these situations. It is best to leave these types of counseling, mental health, and other related issues to the trained professionals, and simply direct employees to resources that may be available to provide appropriate help.
These issues just scratch the surface. The key is to be flexible, exercise common sense, and seek legal help early on if needed so that the issues can be addressed moving forward, not repaired looking back.
—A. Edward Hardin Jr., Erin Kilgore and Brian Carnie of Kean Miller law firm
Before investing significant amounts of money to rebuild, strategists suggest business owners take a hard look at viability in the emerging post-disaster marketplace
In the days following a natural disaster, many business owners simply want to “return to normal,” doing what they had been doing before the catastrophic event.
But a report from the Public Entity Risk Institute finds that a number of those businesses fail after a major disaster, in part because the company is unable or unwilling to respond appropriately to a new, post-event environment.
The institute, which works with public, private and nonprofit organizations to enhance risk management, notes in “After the Disaster … What Should I do Now?,” that many of those who live in a damaged area and lost their homes may move away, leaving the neighborhood changed forever—with new relationships, new neighbors and new business patterns. “The businesses that survive,” the authors conclude, “will be those whose owners and managers understand and adapt to the new business environment.”
The institute report notes that owners often don’t consider all of the options available, which include reopening their business at the same location or another; offering the same products and services or different ones; closing the business; or trying to sell or transfer it to someone else. Before reopening, the authors advise, managers should consider whether their customers might change their buying habits, or whether they still want or need the product or service provided—particularly if the company sells goods and services that rely on discretionary money.
Owners must also consider how much money was lost in the disaster. The Risk Institute report suggests it’s time to conduct a new feasibility analysis, as well as rebuild a pro forma and cash flow analysis before committing any money, time or commitment to the new venture.
“Often, reopening after a major disaster is like starting a new business,” the institute notes. “Banks and the Small Business Administration will probably be willing to loan you money to reopen based on your experience before the disaster, but before you make that commitment, make sure you have a solid business plan for the post-disaster environment.”
Emergent Method President Nick Speyrer, a consultant who helps guide companies and public entities in the Capital Region through organizational design and strategic management, says he understands that companies are in “fight or flight mode right now, and they want things back to normal as quickly as possible.”
Quoting the adage, “Never let a good crisis go to waste,” he advises business owners—even those who weren’t themselves flooded—to “really stop, think and pause, and treat this situation as if they were starting a brand new business.”
Speyrer recommends talking to key customers to determine whether their plans are going to dramatically change, and how they are planning to respond to the disaster. The next step should be talking to employees to ensure your workforce will be available to meet customer needs. The third step? “Talk to the bank, because cash flow is going to get tight. See what options are available, whether it’s to defer payments or increase lines of credit.”
Questions that all company owners should be asking themselves right now, he advises: Are we going to continue doing what we’ve been doing, or are we going to stop or change what we’ve been doing. The answers should be driven by how their customer base might change.
Speyrer also notes that while the tendency may be to think about how to survive today, or even the next three to six months, the focus must be on what the company might look like in the next three to five years.
“Based on our community’s response to this crisis over the past week, there are plenty of reasons to be optimistic about our ability to recover and rebuild,” he says. “But the reality is the business environment has changed. Things are going to be different—there will be new opportunities and new challenges—and I would encourage owners and managers of businesses to be diligent and not be hasty with assumptions as they make decisions about how they will respond, especially when it comes to investing new capital.”
In Livingston Parish, a chamber facing its own recovery challenges plans to take the lead
In times of disaster, many businesses look to the local chamber of commerce for guidance. But what if the chamber itself was a victim?
That’s the case in Livingston Parish, where an estimated 70% of homes and businesses were flooded.
The Livingston Parish Chamber of Commerce headquarters is located on Veteran’s Boulevard in Denham Springs, a business corridor through the city that that connects Range Avenue with U.S. 190. Members cut the ribbon on the new building—built according to new flood elevation requirements—a year and a half ago. But a photograph taken after the storm shows muddy water up to its windows.
Though its building was flooded and the chamber remains without telephone or internet service, Executive Director April Wehrs is doing what she can to come to the aid of the parish’s injured businesses and threatened economy.
After hosting a packed Leads for Lunch event last Thursday afternoon while the sun was still shining, she kept her members up to date via social media throughout the storm, often well into the night: Video of commercial districts in Denham Springs, Walker and Albany, and, later, notifications of businesses that were open. On Monday afternoon came that image of the chamber headquarters; Wehrs shared it on Facebook, noting the irony that Veteran’s Boulevard was once named Highpoint.
That’s when the comments and calls started rolling in: From Missouri, North Carolina, Michigan, Illinois, Kansas, Central Louisiana and Jefferson. Her counterparts in Galveston, Dade County and Jefferson Parish called with a message: They had survived disasters like hurricanes Andrew and Katrina, and they wanted her to know that the chamber of commerce would play a very important role in recovery.
“A lot of chamber executives form across the country have dealt with terrible devastation, and they reached out right away,” she says. “They were telling us that they know it looks very bad and devastating, and it looks insurmountable right now, but the message from all of them has been that we can play a key role in recovery.”
By Tuesday, she had updated the website with an entire section on business recovery resources, and sent out her first e-newsletter outlining the chamber’s plans moving forward. Daily updates have followed, notifying members of scattered member businesses that are open—several doctors’ offices and clinics, a Walgreens, the Dairy Queen on Juban Road, Holmes Building Materials and the Olinde’s Mattress Store in Walker. Banks have let her know it’s probably going to be two weeks before they’re fully operational again. Looking down Range Avenue—the main strip through the city of Denham Springs—she says woefully “it’s pretty much done.”
Her immediate goal is connecting businesses with the resources they need to rise again. But she knows it’s going to be a long road to recovery.
“I want everyone to know that as the person who is supposed to be in charge, I’m on it,” she says. “But it frustrates me that we can’t help people like we want to right now.”
Resources for businesses
The Walker Business Recovery Center is now open, offering a wide range of services to businesses impacted by the severe storms and flooding that began last week.
The center is located at the Southeastern Louisiana University Literacy and Technology Center, Room 101, 9261 Florida Blvd. in Walker. It will be open on weekdays from 8 a.m. to 4:30 p.m. No appointment is necessary. All services are provided free of charge.
SBA representatives will meet with each business owner to explain how an SBA Disaster Loan can help finance their recovery. LSBDC consultants at the center will provide counseling on a wide variety of matters designed to help small business owners re-establish their operations, overcome the effects of the disaster and plan for their future. Services include assessing business economic injury, evaluating the business’s strength, cash flow projections and most importantly, a review of all options to ensure each business makes decisions that are appropriate for its situation.
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The Baton Rouge Area Chamber has a Disaster Response guide on its website with multiple resources for companies in recovery mode. Louisiana Economic Development also has a Flood Recovery Assistance section on its website with resources for impacted businesses. The Louisiana Business Emergency Operations Center provides disaster-specific communications from the Governor’s Office of Homeland Security & Emergency Preparedness to industry associations and almost 2,200 registered member organizations to coordinate private-sector businesses and nonprofit organizations.
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The U.S. Chamber of Commerce Foundation Disaster Help Desk is available 24/7 to help businesses mitigate disaster interruption and, after disasters, to enhance community economic recovery. It’s available free of charge to any caller to answer questions. Reach the Help Desk at 888-MY-BIZ-HELP. The organization also offers a Small Business Recovery Quick Guide and a Chambers of Commerce Recovery Quick Guide online.
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For additional resources, see Business Report‘s Resources and Information to Help Guide You Through Recovery and the Louisiana Flood Resource Center published by our sister publication, 225 magazine.
If there’s a disaster recovery-related topic that you’d like to see addressed in tomorrow’s edition of Daily Report Extra: Helping the Capital Region Rebuild, send us an email.