Firms Hit by Hurricane Struggle With Paychecks
Thursday, September 1, 2005
Companies hit by major destruction and lost business also are grappling with how generous they can afford to be to employees who have lost both homes and work because of Hurricane Katrina.
Several large employers in the areas hit by the hurricane and flooding say they will to continue to pay workers -- at least for a time -- even though their operations have come to a halt. Harrah's Entertainment Inc., which has more than 6,000 employees in casinos in the Mississippi cities of Biloxi and Gulfport and in New Orleans, will give workers in affected areas emergency-relief supplies and money. It will continue to pay employees their scheduled base pay for up to 90 days.
A recovery fund the company set up will help workers rebuild or relocate. Harrah's also has begun distributing payroll-deduction forms to 100,000 other employees who can donate money to co-workers affected by the hurricane.
Northrop Grumman Corp. has about 20,000 employees on the Gulf Coast and is the largest manufacturing employer in both Mississippi and Louisiana. Spokesman Brian Cullin said that the company does not know how many employees have been displaced but that the company is indebted to many of them. At its shipbuilding yard in New Orleans, 86 workers "were standing watch at our yard while their homes were lost or flooded," Cullin said.
Northrop's employees will receive full pay through at least the end of the week, and the company "is looking to do the best we can for the weeks that follow," Cullin said.
The company flew finance-department employees to Texas to make sure paychecks were written and could be distributed Friday to those who don't have direct deposit, but Cullin said the company is not sure how to get the checks into workers' hands.
Two Lockheed Martin Corp. facilities were damaged by the storm, and both are staffed by workers whose homes were flooded or destroyed. The company will continue to pay employees normally through the end of the week. As the week progresses and the company gets updates about the status of its facilities, it will decide whether to extend that pay.
Employees will also be able to take out loans against their 401(k) plans and will be able to trade advance vacation time for compensation that they can use now, said Tom Greer, a Lockheed spokesman.
Both the NASA Stennis Space Center in Mississippi and the Michoud Assembly Facility in New Orleans, which is operated by Lockheed, remain closed. The Stennis facility provided shelter to about 4,000 employees and nearby residents as the hurricane moved through. It is now being used as a makeshift shelter and a Federal Emergency Management Agency staging area for recovery operations.
The Louisiana AFL-CIO in Baton Rouge is sending mobile units to hard-hit areas so people can sign up for unemployment compensation. "Even if these folks were home, there would be no place to go to work," said Louis Reine, the group's secretary-treasurer.
The Louisiana Department of Labor will be setting up in shelters to sign up displaced workers for unemployment or disaster-relief payments. The department's employees will also set up a station at the Houston Astrodome.
Wal-Mart Stores Inc. initially closed 156 stores in the affected areas. As of yesterday afternoon, 46 were closed. Before the hurricane hit, workers were given a toll-free number to call for assistance or to find out if their store had reopened.
Wal-Mart employees whose stores were shut received pay for the first three days the store was closed, whether they were scheduled to work or not. Employees who need money for food or clothes can ask store managers for $250 in cash assistance. Employees whose stores do not reopen in three days will be provided temporary work at other Wal-Mart or Sam's Club stores if they can get there, according to a Wal-Mart spokeswoman.
The company's "associate disaster relief fund" provides financial help to employees for lodging and food. "We've not had to do this to this degree" before, said Sarah Clark, a spokeswoman. She could not estimate how much money Wal-Mart might spend helping employees.
Most of digital-mapping company 3001 Inc.'s employees are based in Louisiana, Mississippi, Alabama and Florida, said chief executive Bart Bailey. The company is based in Northern Virginia, but it has an office in downtown New Orleans that Bailey said is probably a total loss, and 150 employees are mostly unaccounted for.
The company intends to continue paying health benefits. "We're still examining what to do about salaries," Bailey said. "Number one is we want to make sure everyone is safe. The biggest concern on their part is where are they going to live and their future well-being before even considering going back to work."
Staff writer Neil Irwin contributed to this report.