The Employee Relief Fund (ERF) has emerged as a compassionate and impactful tool for organizations to support their workforce during challenging times.  Recent changes in the tax code can make an Employee Relief Fund a tax-deductible way to improve employees’ financial wellness.

What is an Employee Relief Fund?

An Employee Relief Fund is a financial assistance program established by a company to support employees facing unexpected financial hardships or emergencies.  The purpose of these funds is to help employees cope with challenging circumstances that may arise, such as medical emergencies, natural disasters, sudden financial crises, or other unforeseen challenges.

Employers often implement a transparent application process where employees provide documentation supporting their financial situation.  The application process is often sent to a third-party facilitator to maintain confidentiality and fairness.

What are the benefits for employers and employees?

1.  Tax Benefits

Contributions to employee relief funds are often tax-deductible if the fund is set up as a 501(c)(3), providing financial incentives for companies to contribute and support their workforce.  Contact your tax attorney for details.

2. Tax-Free Assistance for Employees

Financial assistance provided through relief funds is typically considered tax-free income for employees, offering immediate relief without additional tax burdens.

3. Positive Workplace Culture

Participating in employee relief funds fosters a positive workplace culture, enhancing employee morale, loyalty, and overall job satisfaction.

Why Companies Should Participate?

The drive for talent attraction and retention is on the rise.  According to PWC, 76% of stressed employees report that financial worries have had a negative impact on their productivity.  A Glassdoor survey states that 89% of employees believe companies supporting well-being initiatives impact their job satisfaction.  Establishing an ERF provides peace of mind when an emergency arises.

How do you set up an ERF?

1.  Define Purpose

Clearly outline the fund’s purpose.  This standard ensures that the fund aligns with the company’s values and addresses the workforce’s needs.

2. Determine Eligibility

Companies may define specific eligibility criteria for employees to qualify for relief funds.  These criteria could include minimum tenure, total hours worked, no corrective actions, or other relevant conditions.

3. Select a Management Platform

Decide whether to manage the fund in-house or utilize a third-party administrator.  Top third-party administrators offer specialized platforms that streamline the donation process and fund management.

4. Establish Fund Structure

Determine how the fund will be structured, including the contribution process, fund management, and the decision-making process for disbursing assistance.

5. Create Transparent Policies

Develop transparent policies and procedures for employees to apply for assistance.  Communicate the application process and eligibility criteria to avoid confusion.

Who can donate to an ERF?

  • Employers: Companies are often the driving force behind funding an ERF.  These donations can be made directly to the fund or in a matching program, matching employee contributions to the relief fund.
  • Employee Participation: Encouraging employees to participate in donations fosters community and solidarity within the workforce.  It enhances employee engagement, satisfaction, and pride in working for a socially responsible organization.

Employee relief funds, facilitated by top third-party administrators, embody a commitment to employee well-being and corporate social responsibility.  By understanding the qualifications, benefits, setup process, and costs associated with relief funds, companies can create a meaningful and impactful initiative that provides financial support during times of need and strengthens the bonds within the workplace community.  The involvement of employees in donations further enhances the collective impact, creating a culture of compassion and resilience in the workplace.

How can we help?

Many Employee Relief Funds require criteria to qualify.  These criteria can include tenure, minimum hours worked, below specific corrective action criteria, or any other factors.

Time Equipment Company can set up a News Item on your Dashboard or give you a report to let you know when the criteria are met.  This way, your company can notify your employees that they qualify for your Employee Relief Fund.

For more information, contact Time Equipment Company at 800-997-8463 or