Employee Emergency Relief Fund (EERF)

September 10, 2020 Update on Status of EERF

The administration has been moved by the response from faculty, staff and trustees to contribute to the Employee Emergency Relief Fund (EERF). In less than two weeks, we have reached approximately 85% of our initial goal, thanks to support from 55 community members (69% staff, 27% faculty and 4% trustees). As mentioned in the August 27 and September 3 communications to faculty and staff, we have been working on expanding the EERF program in the event that we exceeded our initial goal of $100,000 goal. As a result of the positive response from the HMC community, we are revising our fundraising goal to $200,000 so that we can expand the relief provided to our furloughed employees to include health insurance subsidy and other emergency relief, as described below. Below is a summary of the three components of financial assistance we are providing through the EERF.

EERF – IRC 139 AWARDS

Requests for expense reimbursements may be submitted in $100 increments and up to a maximum of $1,500 per employee. Reimbursements are provided on a non-taxable basis but are limited to reasonable and necessary personal, family, living, or funeral expenses incurred as a result of the COVID-19 pandemic, as permitted by Internal Revenue Code 139. One common item that is being reimbursed is for education support (e.g., additional hardware costs, internet costs, etc.) during the COVID-19 crisis for employees or dependents. The EERF selection committee has already met three times and has granted awards to many furloughed staff. While most of our furloughed staff members have been able to submit requests for eligible disbursements, there has been a group of individuals who have not had eligible disbursements under this plan, and thus, we have continued to evolve the EERF program to include the two other components, listed below.

EERF – HEALTH INSURANCE SUBSIDY

The College previously committed to pay the employer’s portion of the furloughed employees’ health insurance during the furloughed period. Now we are endeavoring to also pay for the employee’s portion of health insurance (medical, dental and vision) during as much as the furloughed period as possible. The estimate for furloughed employee’s share of health insurance premium for September through December 2020 is approximately $80,000. Given the current balance of EERF funds, we believe we can cover the furloughed employee’s portion of health insurance for September and October 2020 in addition to offering approximately half of the maximum IRC 139 awards. As stated above, we have raised our initial fundraising goal, in order to also cover this health insurance subsidy for furloughed staff for the months of November and December 2020 and to continue providing other EERF financial assistance, including providing the maximum IRC 139 awards for eligible employees. If we don’t reach our goal, the amount of employee health insurance subsidy and other EERF financial assistance will be adjusted as necessary.

EERF – FORGIVABLE EMERGENCY LOAN PROGRAM (ELP)

After considering the awards and health insurance subsidy components of EERF, there are still a handful of individuals who cannot benefit from these two programs, for various reasons, including not having any eligible non-taxable disbursement or not being on the College’s health insurance plan. As such we have worked to create a mechanism to assist these individuals.  Since non-forgivable, interest bearing loans can be a significant burden, especially for lower paid individuals, the Business Affairs Office (BAO) worked with members of Cabinet, tax advisors, EERF selection committee members, Faculty Budget Committee (FBC) members, and others to discuss and create a forgivable Emergency Loan Program (ELP). Loans of up to $2,500 will provided to eligible furloughed employees. These loans contain no interest, and because of the dollar amount chosen, forgone interest does not have to be taxable. Loans will have terms of one, two and three years, depending on the amount of the loan.  Upon being recalled from furlough, HMC shall forgive a staff member’s loan after one, two or three years of service, (depending on the term of the loan) has been provided from the date the staff member is recalled from furlough.  This program will be focused on furloughed employees who cannot benefit from the health insurance subsidy and the IRC 139 awards. However, if additional funds are available, other eligible furloughed employees will be considered for the ELP. The HR office will work with eligible furloughed employees to help them apply for the ELP.

FUND RAISING TARGET

In order to meet the needs of our furloughed staff through the three subcomponents of EERF financial assistance (e.g. IRC 139 awards; health insurance subsidy and ELP), we have increased our goal to $200,000. If we don’t reach this goal, the amount of employee health insurance subsidy and other EERF financial assistance will be adjusted. If more funds are raised, we will continue to look for other allowable ways to support our furloughed staff. If there is any balance left in the fund after the need for furloughed employees is met, excess funds will be used to help mitigate future potential furloughs and salary and benefit reductions.

BAO members are communicating with furloughed employees to help them navigate through the unemployment process (both the state and federal components) as well as informing them about the EERF programs. Furloughed employees have begun to apply for unemployment and some have already begun receiving unemployment. Furloughed employees have asked us to share with those who made the EERF possible, including our generous donors, how grateful they are for your support.

If you are interested in contributing to the fund, note that you can contribute by either donations to the Office of College Advancement, https://www.hmc.edu/give.  Specify your amount in “Other” and indicate “Employee Emergency Relief Fund” or “EERF.” If you are interested in a voluntary temporary salary reduction, through June 30, 2021, please contact Dana Nagengast, AVP for HR. She can answer your questions and send you a letter for you to confirm and acknowledge your temporary salary reduction.

We are so proud of our community for your generosity and care for our furloughed employees.

1. EERF – IRC 139 Purpose

EERF – IRC 139 has been established to support furloughed staff who are experiencing unexpected or unforeseen financial challenges as a direct result of the COVID-19 pandemic.  EERF is supported by voluntary employee donations, contributions, and college resources that may be available through other measures, who want to assist HMC furloughed staff facing unexpected financial challenges in these unprecedented times.

Eligibility for Internal Revenue Code (IRC) 139 Awards

To be eligible for emergency relief through the Fund, you must:

  1. be an HMC staff member who was furloughed 100% and who remains furloughed as of the date of the application for EERF due to COVID-19;
  2. regularly work in a benefits-eligible position and earn less than $65,000 per annum; and
  3. have experienced unexpected or unforeseen expenses because of the COVID-19 pandemic.

Student workers are not eligible for emergency relief through the Fund. Note that priority for the awards will be provided to lower paid workers (e.g. those earning less than $40,000 per annum).

Expenses Covered

EERF – IRC 139 awards are intended to assist HMC furloughed staff members who are struggling with unexpected or unforeseen expenses brought about by the COVID-19 pandemic.  Monies will be awarded from the Fund only to reimburse expenses already incurred. Only reasonable and necessary personal, family, living, or funeral expenses incurred as a result of the COVID-19 pandemic will be reimbursed, as permitted by IRC 139.

Examples of such expenses include:

  1. Expenses related to a COVID-19-related death in the immediate family;
  2. Out-of-pocket medical (including mental health and wellness) expenses related to COVID-19 which are not covered by health insurance;
  3. Childcare and/or tutoring expenses due to school closings;
  4. COVID-19-related elder care support; and
  5. Education support (e.g., additional hardware costs, internet costs) during the COVID-19 crisis for employees or dependents.

Examples of expenses not covered include:

  1. Expenses incurred prior to March 13, 2020;
  2. Expenses that are not reasonable and necessary;
  3. Expenses that constitute an income replacement (e.g., payments for lost wages, lost business income, or unemployment compensation) or are reimbursable by insurance or other sources (including other employer sources);
  4. Expenses not incurred as a direct result of the COVID-19 pandemic;
  5. Undocumented expenses and other expenses not permitted under the law; and
  6. Regular rent/mortgage, though reasonable and necessary temporary housing costs resulting from the COVID-19 pandemic may be covered.

IRC 139 Award Amounts

Requests for expense reimbursements may be submitted in $100 increments and up to a maximum of $1,500 per employee.

A staff member may submit more than one request for expense reimbursement, so long as they have not reached the $1,500 maximum allowed. In households with more than one HMC staff member, each eligible staff member may submit a request and be awarded up to the $1,500 maximum so long as the requests are not duplicative.

Given the limited amount of funds available for expense reimbursement, requests may be fully funded up to the $1,500 maximum, partially funded, or not funded at all.

Funds awarded are not taxable as income and are not required to be paid back when used for legitimate and appropriate COVID-19-related expenses.

How To Apply

Applications are submitted through an online process.  If you require assistance with the online application, you may contact HMC’s Office of Human Resources at hr@hmc.edu.

You will be required to describe your unexpected or unforeseen financial hardship due to COVID-19, as well as to provide documentation (e.g., receipts, detailed explanation or other documentation) to substantiate your application. The type of documentation required will depend on the individual circumstances of each application. The information provided will be treated as confidential and will be shared only with individuals directly involved in administration of the fund.

Applications will be reviewed by the EERF committee once all information has been successfully submitted to HR and the application is deemed complete. As noted above, awards will be prioritized first for lower paid workers. All applicants will be notified of the status of their request within two weeks of submitting their application.  Decisions made by the review committee are final and cannot be appealed.

How Long Will the Fund Be Available?

The fund will be available until contributions are exhausted, HMC suspends the Fund, or the federally declared COVID-19 disaster ends.

Whom to Contact With Questions?

Please direct questions about Fund eligibility, awards, or donations to Dana Nagengast at dnagengast@hmc.edu.

2. HMC Community Announcement – September 3, 2020

Greetings Faculty and Staff,

I am following up to my message last week and to comments I made today during the Faculty meeting. Since I sent my email last week, we have received several questions on how the EERF program works.  The EERF Selection committee comprised of Karen Angemi, Lelia Hawkins, Dana Nagengast, and Marco Valenzuela, had their first meeting on Sept. 2, 2020, and have decided to meet twice each week in order to quickly grant awards to our furloughed staff. During their meeting yesterday they began making awards and intend to make additional awards when they meet next week. I am very thankful to the committee for their efforts in reviewing and granting awards to our furloughed employees.

In response to the questions we have received from faculty and staff, well as from EERF committee members, we have developed a website that provides helpful information on how the fund works. The website https://www.hmc.edu/human-resources/employee-emergency-relief-eerf-fund/, includes a list of frequent questions and answers.

I want to provide a huge thank you to the HR team, including Miguel Ruvalcaba and Maria Ramirez, who have spent a lot of time on managing the EERF program. The HR team has been contacting furloughed employees both to help them navigate the process for applying for unemployment and to explain how the EERF program works, as well as supporting them throughout the EERF application process.

As of Sept. 3, 2020, less than a week from launching the fund, we have commitments of approximately $71,000, with a September 2020 balance of approximately $43,000.  Our initial goal has been to raise at least $100,000. We are very grateful to those have donated thus far. If you are interested in contributing to the fund, note that you can contribute by either donations to the Office of College Advancement, https://www.hmc.edu/give  or the other methods described below.  If you are interested in a voluntary temporary salary reduction, through June 30, 2021, please contact Dana Nagengast, AVP for HR. She can answer your questions and send you a letter for you to confirm and acknowledge your temporary salary reduction.

Kind Regards,
Andrew Dorantes, PhD
Vice President for Administration and Finance and Treasurer
Harvey Mudd College

3. HMC Community Announcement – August 27, 2020

Greetings Faculty and Staff,

I am following up to the email that I sent last Friday, August 21, 2020, with the subject line Financial Implications of Fall 2020 Transition to Remote Learning. As previously mentioned, we have heard that many of you want to help those affected by furloughs while seeking ways to avoid future furloughs as well as salary and benefits reductions.  We mentioned that we have been working with tax advisors and other experts to determine ways to help those in need.

We also mentioned that we were working to create a process to allow faculty and staff to contribute by either making a donation or through a voluntary reduction in salary (which frees up operating resources) to be used for a new fund known as the Employee Emergency Relief Fund (EERF). The EERF is to be used to provide direct assistance to staff whose position has been furloughed due to COVID-19. Once this need is met, any balance in the fund will be used to help avoid future potential furloughs and salary and benefit reductions.

Note, the EERF that is being created utilizes Internal Revenue Code (IRC) 139. There are several other colleges across the country that are creating similar IRC 139 funds. In order to launch the program quickly and to provide immediate relief to furloughed employees, we are initially launching the fund to provide non-taxable payments to recipients, for qualified expenses, as defined by IRC 139. As the weeks progress, we will see how the program is meeting the needs of our furloughed employees and if necessary, we will make changes, consistent with laws and regulations.

Since the email on August 21, 2020 was sent out, we have heard from many faculty and staff that they would like to begin contributing and providing support to furloughed employees immediately.  Consequently, we are providing the following methods to contribute the purposes described above:

1) Charitable Contributions – Employees can make charitable donations to the fund through the Office of College Advancement through the following means:

  • Credit Card: Credit card donations are securely accepted at hmc.edu/give. Specify your amount in “Other” and indicate “Employee Emergency Relief Fund” or “EERF“.
  • Check: Mail your check to the address below and include “Employee Emergency Relief Fund or EERF” in the memo field of your check: Harvey Mudd College, Office of College Advancement, 301 Platt Blvd., Claremont, CA  91711.

2) Reduction in Salary – If you are interested in a voluntary temporary salary reduction, through June 30, 2021, please contact Dana Nagengast, AVP for HR. She can answer your questions and send you a letter for you to confirm and acknowledge your temporary salary reduction.

Concurrently, the Office of Human Resources will reach out to furloughed employees informing them of the new Employee Emergency Relief Fund, and encouraging them to apply. A committee, comprised of the following individuals, has been established to review the applications and make the awards:

  • Karen Angemi, director of the president’s office and secretary to the board
  • Lelia Hawkins, associate professor of chemistry
  • Dana Nagengast, assistant vice president for human resources
  • Marco Valenzuela, associate dean of students and director of residential life

We thank you for your consideration in assisting members of our community during these challenging times. We know that donations to the Employee Emergency Relief Fund will be incredibly helpful to our furloughed staff.

Kind Regards,
Andrew Dorantes, PhD
Vice President for Administration and Finance and Treasurer
Harvey Mudd College

4. Ways to Contribute

We are providing the following methods to contribute the purposes described above:

1) Charitable Contributions – Employees can make charitable donations (tax-deductible/counted as charitable contribution) to the fund through the Office of College Advancement through the following means:

  • Credit Card: Credit card donations are securely accepted at hmc.edu/give. Specify your amount in “Other” and indicate “Employee Emergency Relief Fund” or “EERF“.
  • Check: Mail your check to the address below and include “Employee Emergency Relief Fund or EERF” in the memo field of your check: Harvey Mudd College, Office of College Advancement, 301 Platt Blvd., Claremont, CA  91711.

2) Reduction in Salary – If you are interested in a voluntary temporary salary reduction, (non-tax deductible/not counted as a charitable contribution), through June 30, 2021, please contact Dana Nagengast, AVP for HR. She can answer your questions and send you a letter for you to confirm and acknowledge your temporary salary reduction.

5. FAQ

Several questions have been received by faculty and staff on how the program works. We have provided these questions and responses:

  1. Can you speak to the scope of the EERF IRC 139 awards made to the employees?  As you will see in the information above, the types of reimbursable expenses appear restrictive at first glance. This is because the funds will be provided on a nontaxable basis. This approach results in every penny of the award going to the employee, and none of it will go toward taxes. Although this seems restrictive, money is fungible. If a family used other funds they had to pay for medial, childcare or education, they could be reimbursed for these items and then use the money they receive from EERF for whatever they want. This fund has been successfully used by other institutions across the country, and the quickest way to get assistance to our furloughed employees was to utilize a fund like this. As noted above, other components of the EERF program (e.g. health insurance subsidy and ELP) are available for those that cannot benefit from IRC 139 awards.
  2. Can you speak to the maximum EERF IRC 139 award of $1,500?  As you note above, there is a maximum award of $1,500. Counsel, who assisted us in preparing the plan, reviewed many IRC 139 plans and most granted between $500 and $1,500. We acknowledge that $1,500 may not seem like a lot, but it will make a difference to the furloughed employees. As previously communicated furloughed employees should be eligible for state unemployment, however, decisions to award unemployment to an individual are made by the State of California Employment Development Department (EDD). Furloughed employees have begun to apply for unemployment and some have already begun receiving unemployment.  Any COVID-related federal unemployment payments, including the $300 a week from the Federal Lost Wages Assistance Program, are in addition to the state award. As noted above, in addition to the EERF- IRC 139 awards, EERF also includes health insurance subsidies and a forgivable Emergency Loan Program (ELP).
  3. Can you speak to how EERF IRC 139 awards will be made?  An EERF Committee has been selected and committee members are listed below. The committee has reviewed the plan document and understands how plans like these (based on IRC 139) work. In order to assist the employees who are most vulnerable, awards to lower paid employees (those making less than $40,000 per annum) will be prioritized. In order to manage the available funds, awards will be made in rounds. For example, up to $500 awards will be made in the first round until it is known that there are sufficient funds to begin another round of awards.
  4. How have you communicated to furloughed staff and have EERF IRC 139 awards been made yet?  The HR team began contacting furloughed employees as soon as the program was launched on Friday, Aug. 28, 2020. Team members have had one or more conversations with furloughed staff so they are aware on how to apply for the funds. The HR team has been supporting the furloughed staff both in how to apply for unemployment as well as how to apply for EERF. The furloughed staff have been extremely grateful to the College for the all their efforts, including the generosity of faculty and staff who have made contributions to EERF to make this possible. The committee began meeting on Sept. 2, 2020 and will be meeting twice each week. The committee has begun granting awards. HR has prepared individual award letters, which will be sent to furloughed employees. Checks to the employees will be processed each Friday.
  5. Are individuals that volunteered for furloughs eligible for the EERF awards?  Only eligible staff members who were furloughed 100% and who remained furloughed are eligible for EERF financial assistance.
  6. What happens if we receive more than the initial goal of $100,000?  The EERF is to be used to provide direct assistance to staff whose position has been furloughed due to COVID-19. Hoping that we would reach our $100,000 goal, the Business Affairs Office explored additional ideas with tax and legal counsel that would allow us to provide financial assistance in addition to the IRC 139 plan. As noted above, in order to meet the needs of our furloughed staff through the three subcomponents of EERF (IRC 139 awards; health insurance subsidy and ELP), we have raised our goal to $200,000. If we don’t reach this goal, the amount of employee health insurance subsidy and other awards will be adjusted. If more funds are raised, we will continue to look for other allowable ways to support our furloughed staff. If there is any balance left in the fund, after the need for furloughed employees is met, excess funds will be used to help mitigate future potential furloughs and salary and benefit reductions.
  7. Do furloughed employees have to apply for the EERF health insurance subsidy and how have furloughed employees been informed of this subsidy?  Furloughed employees do not have apply for this subsidy. The College will pay for the furloughed employee’s portion of health insurance based on what plans the employees had when they were furloughed.  BAO has informed each employee of the subsidy for at least September and October 2020, based on the available balance in the EERF. Employees have asked us to share with those who made this possible, including our generous donors, how grateful they are for the support.
  8. How does a furloughed employee apply for the EERF-ELP program?  HR will be reaching out to the furloughed employees who are not able to benefit from the EERF- non-taxable award program and the health insurance subsidy. In addition, furloughed employees should reach out to HR at hr@hmc.edu if they have any questions on eligibility or how to apply.

6. Message from the Employee Emergency Relief Fund Committee

From all of us on the EERF Committee, we want to share that we are honored to serve on the committee with the goal of assisting HMC furloughed staff members. We are extremely grateful to the approximately 20 individuals, comprised of cabinet, staff and faculty, who have already contributed to the fund by either contributions or salary reductions.

As of Sept. 3, 2020, less than a week from launching the fund, we have commitments of approximately $71,000, with a September 2020 balance of approximately $43,000. We had our first meeting on Sept. 2, 2020, and have decided to meet twice each week in order to quickly grant awards to our furloughed staff. We have developed a robust process to review and make award selections.

If you have any questions, please contact any of us: