Strategies for Employers

Taking Advantage of EITC

Challenge:

The Earned Income Tax Credit can support a low-wage worker’s financial security but many are unaware of it or unsure how to apply.

Strategies:

Direct your workers to free tax preparation services via the NC Department of Revenue’s NCFreeFile page, which lists free resources and eligibility requirements:

• NCDOR: eFile Information: NCfreefile and eFile for a fee
• Consider offering tax preparation help by inviting tax prep professionals to conduct workshops or consult with your workers on-site.

Determining Salary Starting Point

Challenge:

As employers seek to hire new staff, they often request the salary history of those being considered for hire. Unfortunately for some candidates, this information is at best sketchy, and for some, non-existent.

Strategies:

Employers should shift the focus from one of review of previous salary history to utilizing current market rates for the role and functions to be performed in the job. This will demonstrate a recognition of the candidate’s current skills and accomplishments and will promote a positive hiring environment.

Support workers in career path planning

Challenge:

The workers you need may not be familiar with pathways to advancement in your organization. This may lead some to leave for a modest increase in compensation elsewhere. If they knew their future potential, however, they may stay.

Strategies:

Increasingly, employers are recognizing the importance of identifying career paths and high-growth occupations, and helping employees plan for career growth. Benefits cliff calculators can help workers and employers to see the impact of the cliff, and make informed choices, for longer-term financial stability.

On the Job Training

Challenge:

Often times, in addition to formal training, employers seek individuals who possess actual job experience in the field in which they are hired. In many instances, this type of experience is often obtained through college internships or other means. Unfortunately, for many low-income households, this opportunity is not an option, as wages obtained for any work are needed to meet basic needs.

Strategies:

Offer paid On-the-Job training opportunities for employees to increase their skills, while learning about opportunities at the next level within the organization. Not only does this increase the skillset of current employees, but it also assists with retention of proven, valued employees, increases morale, and demonstrates an organizational commitment to advancement for all staff.

529 Plans

Challenge:

529 College Savings Plans provide tax advantages in saving for college. However, many low-wage workers are unable to take advantage of this due to tight budgets. If they could however, this could benefit their family and support long-term economic growth and stability.

Strategies:

Some employers offer an employer match for contributions to a 529 plan, supporting education for workers and their families.

Financial Emergencies and Access to Earned but Unpaid Wages

Challenge:

Unexpected emergencies, like medical costs or car breakdowns, can be difficult to manage for low-wage workers, who may be living paycheck to paycheck. Saving for an emergency fund may be very difficult.

Strategies:

Employers can provide workers with access to a portion of their earned, but unpaid, wages in advance of payday as a way to give them more control over their earnings, support their ability to pay bills and unexpected expenses, and achieve their financial goals. There are applications that integrate with payroll systems and help with this, such as https://Flexwage.com and https://Dailypay.com

Accessing Employer Work Credits

Challenge:

There are employer tax credits available, which are designed to assist employers with hiring individuals who meet specific criteria, such as social security recipients, ex-offenders, veterans, persons with disabilities and youth. Unfortunately, many are unaware of these benefits and fail to take advantage of the same when hiring talent.

Strategies:

Employers should look into the Work Opportunity Tax Credit (WOTC) to discover how this program can benefit their organization. WOTC provides an opportunity for employers to save on taxes paid based on their hiring of individuals in specified categories. Information on the WOTC can be accessed by visiting the US Department of Labor webpage at dol.gov/agencies/eta/wotc.

Childcare Access

Challenge:

Childcare problems can be numerous. Some workers have difficulty affording childcare, and may decide that low wages will not cover the cost. 2nd or 3rd shift childcare may be hard to find. The location of available care may be logistically difficult. And when a child is sick, the worker may be unable to find an alternative and may miss work.

Strategies:

Offer childcare search and referral services to your workers. Child Care Resources, Inc. offers free childcare referrals as well as information on childcare subsidy. www.childcareresourcesinc.org

Consider shift changes if availability of 2nd or 3rd shift care is a problem. Additionally, consider the possibility of staff working from home, if this is a viable option.

Addressing a Lapse in Employment

Challenge:

Some employers utilize application software to screen applicants for potential hire. Based on certain algorithms, some potential candidates are automatically screened-out due to a lapse in employment without the opportunity to provide an explanation. This is unfortunate, as some households may have been required to take time off due to childcare issues, family illness, or other extenuating circumstances.

Strategies:

Eliminate this automatic exclusion from your hiring process. Screen applicants based upon their presenting skills and ability to do the job, and directly ask them about any lapse in their employment history. The opportunity to share will be both welcomed and enlightening.

Need for time off during a probationary period

Challenge:

Some employers do not allow workers to take time off during their first 90 days, or during their probationary period. And yet, some workers may need to do so, and may therefore leave your employment. This is especially difficult for single parents and workers who are the primary caregiver in their home.

Strategies:

• Consider allowing workers to use PTO they have earned, without penalty, even during the probationary period.
• Consider removing the probationary restriction altogether.

Building Financial Literacy

Challenge:

Financial Literacy is a challenge for many people, and is no different in many tight budget households. Families with limited financial knowledge often fall prey to predatory lending and other unhealthy credit schemes. This often leads to unnecessary stress and trauma in a household.

Strategies:

Employers can offer financial education classes to all employees, which can assist not only with establishing a budget to meet current household needs, but can ensure that families are equipped with the information necessary to ensure economic mobility and future wealth planning. As employees increase their earnings, other opportunities for creating a culture of wealth can be explored. Common Wealth Charlotte offers several classes to assist employers and employees in this effort. You can reach them at Common Wealth Charlotte.

Paid Leave for Sickness or to Care for Others

Challenge:

Some employers do not provide paid time off (PTO) to all workers—especially part-time workers. This can result in absenteeism, workers coming to work sick, or negative impact on the worker’s family finances.

Strategies:

• Consider offering sick leave and paid time off to all workers.
• Consider reverting to a “bank of days” approach rather than sick leave and vacation time. This allows workers to manage sickness, and caregiving responsibilities.

Perks to Assist Low-wage Earners

Challenge:

In many companies, perks such as bonuses, paid parking, life insurance, and 401k contributions, are extended to mid and upper-level employees, to encourage retention and demonstrate employee value. To further assist with retention of valued staff, these and other perks can be offered to frontline staff as well.

Strategies:

In an effort to recognize employee value throughout the entire organization, consider offering perks to frontline employees which would not only enhance attraction to potential new hires, but would boost employee morale, retention and word-of-mouth throughout the community regarding the organization’s commitment to all its employees. Offering low-cost perks could go a long way in allowing frontline employees to utilize their base salary to meet more pressing household needs, as often, out-of-pocket costs represent a higher percentage of salary for lower-wage employees than those in mid to upper-level positions.

Worker Health Needs

Challenge:

Health care is expensive, and some low-wage workers feel they must forego preventive care due to the cost as well as the necessary time off. This can lead to higher incidence of acute illness, use of emergency rooms, and increased costs to employer health plans. Ultimately, your workforce may be less healthy and absenteeism costs can rise.

Strategies:

• Health care is expensive, and some low-wage workers feel they must forego preventive care due to the cost as well as the necessary time off. This can lead to higher incidence of acute illness, use of emergency rooms, and increased costs to employer health plans. Ultimately, your workforce may be less healthy and absenteeism costs can rise.
• Explore the possibility of offering tele-medicine and phone or video appointments for common ailments through your health insurer.

Securing Retirement

Challenge:

While saving for retirement is a goal on which everyone should focus, this is often a goal that seems out of reach for low-income households, as often, every dollar earned is needed to meet basic household needs or pay off existing student loans.

Strategies:

Offer the option for staff to repurpose 401K contributions to address student loan repayment or other pressing financial needs the family may deem as immediate. Removal of these barriers can often generate opportunities to save for retirement.