Payroll Continuity Plans When Natural Disasters Strike: Are You Prepared?

1. Presented by:
Payroll
Continuity
Plans
When Natural
Disasters Strike:
Are You Prepared?
Presented by:

2. With two major natural disasters
hitting the U.S. in a two-week span
during 2017, employers are once
again reminded of how important it
is for their payroll departments to
have a business continuity plan in
place to keep them operating.
Of course, the imminent threat
of a natural disaster should not
be necessary to remind payroll
departments that they need a
business continuity plan. This is
something that should already be
in place and continuously reviewed.
By doing so, payroll departments
are better prepared when events
such as Hurricanes Harvey and Irma
occur.

3. TechTarget says that a business continuity
plan acts as a comprehensive document,
outlining the activities required for
a business unit to operate, the risks
associated with any interruptions, and the
steps required to ensure business continuity
in the event of a business interruption.
What should be in your
business continuity plan?
According to TechTarget, an online
technology provider business continuity
is a proactive process and encompasses
the procedures business units must
implement to ensure they can operate
as close to normal as possible following
either a natural disaster or major
technological interruption.

4. The plan should also include:
• Contact information for employees
and external stakeholders
• Changes to management procedures
• Guidelines on when to use the plan
• A schedule for reviewing, testing and updating
the plan
What do payroll departments need to consider?
When payroll departments are writing their business continuity plans, they must
consider the activities that are unique to them – and which every employee in the
company relies on.
This means payroll departments must review their payroll and tax report filing
schedules, the submission and approval of employee timecards, and the processing
of paychecks, to name a few.

5. They should identify the individuals who
are involved in all of the department’s
activities in order to keep it running,
and should note who works in company
headquarters and who works in other
locations. It’s important to note if
there are individuals in one office
who can access the information
and carry out the same payroll
activities if another office experiences
a business unit interruption.
IRS assistance following natural disasters
While companies must do what they can to prepare for and mitigate the effects of a
natural disaster on business operations, they can generally expect the IRS to step in
and alleviate some of the pain in the event of a federally declared natural disaster or
catastrophic event.
Generally, the IRS provides automatic filing and penalty relief to
taxpayers with an address of record in designated disaster areas.

6. The IRS plans to waive late-deposit
penalties for federal payroll and excise-
tax deposits that are normally due
during the first 15 days of a disaster
period. However, the postponement of
time to file and pay does not apply to
employment and excise tax deposits.
In the aftermath of Hurricane Harvey, the IRS extended the deadlines to January
31, 2018 for businesses operating in 39 Texas counties to file tax returns and make
payments. The deadline extensions apply to payroll-related filing and payment
deadlines that began on August 23, 2017.

7. Finally, in the event of a federally-
declared disaster, Section 139 of
the Internal Revenue Code permits
employers to offer disaster-relief
payment programs to employees that
provide tax-free reimbursement. These
payments can be used to offset various
items related to the disaster, such
as medical, temporary housing, and
transportation expenses not covered by
insurance plans. The payments can also
be used to pay for repairs to homes or
the replacement of personal items.
The IRS also said it plans to allow those
affected by Hurricanes Harvey and Irma
to take hardship distributions or borrow
funds from retirement plans, and will
waive a six-month ban on 401(k) and
403(b) contributions that typically
applies after a hardship distribution.

8. www.isolvedhcm.com