Yes, you can! Many large companies and organisations do have systems in place to offer financial support to their employees for when they need it most. This could involve an advance on your paycheck, or an interest-free, low-cost loan until you are financially sound again.
Financial assistance schemes are actually quite common, and in the wake of the COVID-19 pandemic, many employers are searching for ways to support their employees in light of the financial hardships caused by the pandemic and the related quarantine.
Financial assistance schemes they are designed to help loyal members of staff if they need extra money for such things as medical bills (for themselves or their family), funeral costs or even a loss of home or accommodation due to unexpected circumstances. You may find that the repayments are taken out of your next pay cheque or drip fed out of multiple pay cheques in the future. But either way, it is good to know that there is assistance available if you need it.
You could speak to your employer about a cash advance loan. A lot of large organisations have this in place to help their employees, if needed. This may include an interest-free loan with your full monthly salary 30 days in advance.
However there may be strict terms surrounding this such as when this must be paid back or whether it gets taken out of future wages. You may not be able to use this every month, but a lot of large corporations have this facility in place to assist their employees.
Plan Carefully – Important!
If you are going to ask your employer for financial assistance, make sure that you know exactly how much you need and when you are going to pay it back. Whilst the advance is likely to be interest-free, you do not want to have debt hanging over your head at your place of work.
It is important to consider how you are going to repay it, even if it comes out of your wages and you probably want to avoid having to re-borrow and rely on this source of finance.
You could also consider other alternatives, such as borrowing from family and friends, taking out an online payday loan or selling items around the house that you do not use. Whether it is clothes, board games or bits of furniture, you would be surprised how quickly you could come up with a few hundred dollars if it is needed.
Direct Payments to Employees
Under Section 139 of the Internal Revenue Code, employers may provide disaster relief payments directly to employees to cover reasonable and necessary expenses incurred as a result of a federally declared disaster. These payments will qualify under Section 139 only if the payments are for expenses that are not reimbursable by insurance or other assistance.
The payments could include coverage for expenses such as childcare, home office costs, medical costs, or funeral expenses. Distributions under Section 139 are not treated as taxable income to employees, and the employer is allowed to deduct those payments as ordinary and necessary business expenses. However, the payments cannot be used in lieu of (or to supplement) wages. There is no specific cap on the amount of assistance so long as the payments otherwise meet the requirements under Section 139.
Employee Relief Funds
Employers can also fund employee relief efforts by making a contribution to certain public charities that administer employee disaster programs on behalf of employers. These charities typically offer two types of employee relief programs:
(1) General employee assistance programs
General employee assistance programs provide financial assistance to employees who experience unexpected hardship causing financial distress.
A general assistance fund can make distributions to an employee to help with financial need due to hardship if the employee applies for assistance and provides specific documentation of the need.
(2) Emergency relief programs
Emergency relief programs provide financial assistance to employees who have expenses as a direct result of a federally declared emergency.
An emergency relief program can distribute funds without specific documentation of need so long as the funds are reasonably expected to be used for unreimbursed and necessary medical, temporary housing, or transportation expenses incurred as a result of the emergency.
As with funds paid pursuant to Section 139, employee relief funds cannot be used for wage replacement.
Overall, whilst not every employer is able to offer financial assistance, you will find that a lot of larger companies do have financial assistance programs in place for instances of employee hardship, even if they aren’t spoken about too much.
Justine is a full-time writer with lots of expertise and a wealth of experience in the financial world. In particular, she specializes in household income and consumer finance across the United States. Follow her articles for useful advice and top tips, guides on how to save money and lots more.