Payroll’s Role in Corporate Disaster Preparedness Plans

Payroll’s Role in Corporate Disaster Preparedness Plans Presented by: Thomas Whalen Director of Sales, NE Region TFG Card Solutions, Inc. 38 Corrigan Way Old Tappan, NJ 07675 646.285.2101 800.457.5809 trwhalen@optonline.net TFGCARD

Agenda • Overview of corporate disaster plans • Payroll’s role in disaster preparedness • Disaster’s impact on the employer and employee • Tax deposit and filing relief • Implementation recommendations • Q & A • Suggestions

Terminology Business emergency plan Corporate disaster preparedness plan Emergency management Crisis management/planning Business continuity planning Disaster recovery planning Contingency planning

dis·as·ter (dĭ-zās'tər, -sās'-) n. An occurrence causing widespread destruction and distress; a catastrophe. Anything that disrupts your pay process

Does your business have a plan? • Do all employees know what it is? • Have you contributed to the plan? Companies across the globe are looking for ways to ready themselves for these disasters before they happen.

Typical components of disaster preparedness plans Pre-Event Planning – Identify the Issues and Put Tools in Place. Threat avoidance Alternative site evaluation Succession planning Resource stockpiling Insurance Training Testing

Put the plan in motion – Resources help you get started. http://www.ready.gov/business/_downloads/sampleplan.pdf

Typical components of disaster preparedness plans • Operational Recovery • Life Safety • Containment and clean-up • Damage assessment • Crisis communication • Mobilization • Interim/Manual operations • Operational recovery • Return home/Back to “normal”

What about payroll?

What about payroll? Payroll departments have a key role in corporate disaster planning, although most don’t realize it until it’s too late!

The need for pay is now GREATER than EVER! What happens when…

The delivery mechanisms you rely on to disburse payroll throughout the country are disrupted due to natural or manmade disasters?

Source: FDIC Economic Inclusion Study The easy answer = Get ALL employees on Direct Deposit Goal: 100% direct deposit participation Reality: Underbanked employees currently rely on paper

¼ of your workforce can’t participate in your plan. • Key Reasons for Unbanked in America: • Not enough money • High service charges • Bounced too many checks • Do not trust banks • Banks do not feel welcoming • Language barriers at banks

Hurricane Katrina Only 1/3 received the aid in their greatest time of need. WHY? Client: • National footprint • Payroll operations not affected • 20 stores in Gulf Coast region affected by hurricane • Corporate plan distributes $500 aid to each affected team member

Alternative access to money • Paper pay checks require employees to: • wait for payroll to stop payment • wait for the paycheck to be re-issued • figure out how to get check cashed without ID The tragic element of what’s happening doesn’t pay the bills. Employees need alternative and immediate access to money. What is the importance of employee direct deposit participation, especially when disaster strikes?

Check cashing stores ran out of money! Even when checks were delivered…

The back-up plan… • Ensure all employees, the banked and unbanked, are on direct deposit. • Traditional Bank Account • Account at Credit Union • Alternative direct pay

Now that we understand… Pay Distribution Goal 100% on Direct Deposit: 1stPartners in place: banks, credit unions, payroll cards 2ndEffective internal team communication 3rd Management buy-in

Payroll down Downtown Ft. Worth, TX 2000 What happens when disaster strikes payroll?

Processing systems? • Tax deposits? • Overnights? • Operations? What is payroll’s back-up process for:

Be Proactive How proactively has your payroll department contributed to the company’s disaster plan? By having a plan in place you are able to: • Your biggest investment, your employees • Get to the root of the problem (direct deposit) • Understand and access the tax implications, benefits, and aid available • Gain full support of management team in direct deposit efforts

Checklist Payroll’s Plan • Appoint payroll emergency team • Back up banking contacts • Tax resource • Set up tax preparation service specializing in business contingency planning • Learn about Disaster Assistance available through the IRS: http://www.irs.gov/businesses/small/article/0,,id=147154,00.html • Implement an alternative funding platform to accept emergency payments • Debit card solution – to get to 100% direct deposit participation - or - • Payroll debit cards to all employees – regardless of direct deposit • Outline emergency funding amounts for each employee or employee type

Selling to Management • Motive – Is payroll’s disaster preparedness plan: • A proactive effort to improve your organization - or - • A response to mandate (i.e. how does your department plan to decrease spending in 2010?) • Investigate – Does your company have a disaster plan? • No plan in place: share this presentation with management team • Plan in place: ask management how to get payroll a seat at the table • Share – Schedule a meeting with management Show management your plan that includes: • Direct deposit mechanism for every employee • Employee welfare plan (emergency funds) • Tax implications • Overall benefit to company

Direct deposit to ease stress, minimize risk, and prepare for the unexpected while: • Increasingemployee productivity. • Protectingfunds and easily replace lost cards. • Stoppingcheck delivery fees. • Minimizingstop payment exposure. • Eliminatingescheatment liability. • Reducingcheck fraud. • Usingexisting direct deposit/ACH platform • Going green – and reducing your carbon footprint • Every year paper checks use over 674 million gallons • of fuel & add over 3.6 million tons of CO2 • to the environment.

Direct deposit helps all employees in their greatest time of need. Don’t let your business be the one without a payroll plan.

Payroll’s Role in Corporate Disaster Preparedness Plans