When employees are faced with a
As employers look for the best ways to keep their workforce satisfied and engaged, finance-related benefits have become top of mind.
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More than half of Americans say they live paycheck to paycheck, according to Bank of America, making saving for emergencies impossible. To provide some level of assistance, more companies are offering emergency relief access, which can help employees when unexpected expenses hit hard. While some companies run these programs internally, others turn to outside solutions that take on the setup and the allocation of funds to workers in need.
"When an employee applies for grant money in an emergency, sometimes they're applying because [of] things that are really hard to talk about," says Catherine Scagnelli, head of marketing at employee relief fund platform Canary. "Removing that HR layer, where someone doesn't have to report to their boss or let their colleagues know what's happening, lowers the barrier for people who really need money to come and get it because they remain anonymous. We aggregate data for the employer, so they know how much money is being given to how many people and what for, but the names are never revealed, which is really important."
Canary advises employers on how much money they should designate per employee based on the needs of their population, as well as any additional parameters they see fit, such as who is eligible. It then acts as a facilitator for the relief funds, putting the money employers allocate into its own nonprofit to distribute once the grant applications are approved. The company charges its customers a recurring fee to manage the funds.
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Emergency relief grants from Canary can be used for a variety of things, from paying monthly bills to an unexpected medical bill or funeral expenses. Once the benefit is made available, employees can log in to the grant application site, answer questions and upload required documents for the Canary team's review. If approved, workers receive the money directly through a PayPal account, and, due to it being classified as a grant, do not need to pay it back.
"If an employee can't pay their rent, can't put food on the table for their family, and they need $1,000 to get by, we offer them a place where they can come and get [it]." Scagnelli says. "Once it's in our nonprofit, we have the power to distribute as soon as the application clears. We base it on IRS guidance or what qualifies as financial hardship, so if they meet that criteria and we have the proper documentation, we can get them the requested [amount] up to the grant limit within 48 hours of application."
Scagnelli notes that emergency relief funds are an effective offering for employees, since financial hardship does not discriminate based on industry or income brackets. Employers should not bet that, because their workers earn a certain amount, they are financially secure, she says.
"It's not just the low-wage workers that need help," she says. "Take out the assumptions that they earn enough and shouldn't need this money, because you don't know. Are they a caregiver for an elderly parent? Do they have multiple children in college? You don't know what their expenses are on the other end of their salary, and if there's a mismatch there or not."
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When employees are given a way to stay financially afloat and maintain their dignity, businesses are walking the walk when it comes to financial wellness, and the payoff for them is big as well, says Scagnelli.
"It builds trust between employees and their employer, which is key in engaged, loyal workforces," she says. "Knowing that your employer offers an anonymous source for emergencies that is not taxable and that you don't ever have to repay… it's going to make [you] happier and more productive at work."
