Chesapeake Bank Blog

12 tips if your employment or finances are impacted by the Coronavirus

Written by Reggie Rossignol | Mar 24, 2020 8:17:00 PM

Valerie has been a stylist at Bridgewaters Salon & Spa in Gloucester for several years. She says that her team closed for their own safety around St. Patrick’s Day but she plans to return to the same salon when the restrictions are lifted. It is the first time that she’s ever had to file for unemployment, but she remains optimistic and supports her team’s decision.

“We decided to close for the safety of our guests, our staff, and all of our families. Shortly after that, the Governor announced a shut down for our industry. It was the right thing to do. It was the right decision to close a week before ordered to, as well. I know small business owners are worried, but my boss absolutely made the right decision,” says Valerie.

She isn’t alone. According to the Washington Post, “The Labor Department reported Thursday that 281,000 people had applied for jobless benefits last week.” In the same article, economists project that “more than a million workers are expected to lose their jobs by the end of March.” With those kinds of numbers, it’s only a matter of time before our communities are also affected. Chesapeake Bank wants to help.

While, we’re working on what we can do to best assist our communities and customers directly, here are tips that will help you financially weather this unprecedented situation.

  1. Identify Needs: Whether or not you have a fund established, the next step is to identify basic needs: Food, Shelter, Transportation, Utilities. If an expense doesn't fall into one of those categories, hold off spending until you're back on your feet.

  2. Retirement Savings Plans: You may need to make some decisions if you have a retirement plan at your place of employment—leave the assets in the plan for now or move them into an Individual Retirement Account (IRA). If you meet the criteria, open an account like this at Chesapeake Bank. You may realize tax benefits.

    NOTE: While taking the cash distribution may be tempting (and even needed), please know that you'll owe income tax on the cash that you withdraw, plus a potential penalty for withdrawing it if you don't meet the criteria. Those two alone can take a significant cut of your money, but then your retirement savings may also be gone. 

  3. Collecting Unemployment: If you’ve been laid off, you may qualify for unemployment insurance. Your benefit, which is taxable income, lasts until either you find a new job or the coverage expires. The term is usually 26 weeks, though it may be extended in times of large-scale unemployment. Here's the link for the Virginia office.

  4. Negotiating Severance Pay: Unless you have an employment contract, your employer isn't required to pay severance, or termination pay, though some employers do. You may want to check with your human resources department about company policy if your supervisor doesn't raise the issue. If the benefit is available, there is not a set amount or standard. It varies by company. Be prepared to negotiate. Virginia also offers a state severance calculator.

    When you accept a severance package, many employers require that you sign a legal document releasing the employer from any claims you may have. You should fully understand the implications of signing the release, so you may want to review it with your legal advisor.

  5. Staying Insured: It's essential to ensure that you have health insurance for yourself and your dependents. If you've been insured through your employer's plan, ask if there is any way that you can stay on a little longer.

    You may be eligible for continuing coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) plan for up to 18 months. But it's not cheap! You pay the full premium your employer pays, plus up to 2% in administrative fees. But some states may require more generous coverage.

    Medicaid and Medicare are also options. Medicare is a federal program that provides health coverage if you are 65+ or under 65 and have a disability, no matter your income. Medicaid is a state and federal program that provides health coverage if you have a low income. Sometimes, you may be eligible for both.

    FAMIS is another option for qualified families with dependents. This is Virginia's health insurance program for children.

    Virginia Dental Association offers information on dental resources and programs in our state for families or individuals who need it.

    If you're married or in a long-term relationship, your spouse or partner may be able to cover you. Most employers offer family plans, and some provide coverage for domestic partners. Usually, you can only join through open enrollment periods, but certain 'life events' qualify, so it's always worth asking.

  6. Financial Obligations: Don’t wait to reach out to your creditors or utility companies. Waiting too long and defaulting on payments will impact your credit. So, it's always best to call the companies you're dealing with as soon as possible and discuss your situation. Because of the wide-scale impact of the Coronavirus, many institutions will be open to help in some way. Larger companies are already putting programs in place for their customers. Don't delay. Assistance may already be available to relieve your load.

  7. Food Assistance: Programs like WIC (designed to serve Women, Infants, and Children) and SNAP (Supplemental Nutrition Assistance Program) are also available through your local state government for qualifying families. You may be able to receive these benefits as supplemental assistance, even if you are not out of work.

  8. Housing: When it comes to housing, the government offers a Housing Choice Voucher Program that can assist qualified applicants with rent. It’s basically a voucher program that is paid directly to the landlord each month to subsidize the cost of rent. The landlord then charges tenants the remaining amount, making rent more affordable for low-income families.

  9. Additional Services and Resources: There are many agencies that can help with a variety of services. One is Temporary Assistance for Needy Families, referred to as (TANF) but more commonly known as welfare. It’s designed to support families who can’t afford basic needs but are on a path to self-sufficiency. TANF is a state-run program. It is a short-term benefit that offers cash and assistance to the families for child care, transportation, and even employment training.

    Second, nearly every county in our markets has a local 'resource council.' This is a network of human service organizations like food pantries, clothing closets, churches, and agencies that provide 'gap' assistance or direction, etc.

    While you can call your local Department of Social Services to inquire about specific benefits, the state also manages 2-1-1 Virginia, which is a digital listing of similar services that you might find in a resource council.

    The Virginia Cooperative Extension also offers a variety of programs that may be of need. If nothing else, you may be surprised what comes up if you simply search the internet for "assistance" with your need 'x' in your town.

  10. What other items can you negotiate with your employer? Continuing to access the office may not be feasible during "social distancing" measures, but asking to keep a laptop or phone a little longer may be an option while you look for another job or apply for services.

    Prorated bonuses, faster vesting periods for stock options, as well as cash for any unused vacation and sick days are typically things that one could negotiate. They may not be realistic right now, but we mention them to help you consider things that may not have been on your radar. Ask yourself what else you need to get through this period, and then ask your employer if it’s a possibility. The answer might be no, but if you don’t ask, then you may be missing out.

    While volunteering your time and services may not be something that you want to do; if you’re able, and if there is work that can be done remotely or “innovatively,” this might be a great time to show your commitment to your company. Not only does giving back feel good, but it can help keep your skills sharp and mind busy while you wait.

  11. Tax relief  In response to the Coronavirus, the IRS is deferring filing and payments for those who need it. The stimulus bill was also passed this week. You can follow updates on that and your tax refund, if you have filed, on the IRS website. You can also file your taxes for free while you're there if you haven't already filed. Set aside as much of this money as you can and only apply it to needs [identified in step 1] wherever possible.

  12. Small Business Owners: Know that many organizations are coming together to aid you too. The Small Business Association (SBA) has a disaster loan program available now. But also check with your local chapters of the following organizations for additional grants and resources that may be available to you: Small Business Development Centers, Economic Development Centers, Chamber of Commerce, and SCORE. If they do not have a direct program, they may be able to steer you toward someone who does.

Whatever your situation is, Chesapeake Bank wants to help. While our service times and methods are evolving as we manage the impact of the Coronavirus, we are available to you. Follow our "together" page for updates and new resources as we come across them.

If you know of a resource that serves our region, share with us in the form below so that we can spread the word. After all, it's all about community.

**Note: We partner with a company called Banzai that offers financial literacy content like general articles, calculators, and tools. This article was based on their content and significantly modified with local resources that you can use now.

Disclaimer

While we hope you find this content useful, it is only intended to serve as a starting point. Your next step is to speak with a qualified, licensed professional who can provide advice tailored to your individual circumstances. Nothing in this article, nor in any associated resources, should be construed as financial or legal advice. Furthermore, while we have made good faith efforts to ensure that the information presented was correct as of the date the content was prepared, we are unable to guarantee that it remains accurate today.

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