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Financial Planning > UHNW Client Services > Family Office News

A Sickening Situation

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For corporate America, flu season means countless lost man-hours. For healthcare professionals, it means 40 million doctor consultations, 750,000 hospitalizations and an estimated 200,000 deaths this season, according to the Centers for Disease Control. For wealthy clients who employ domestic employees to help run their households, the health and financial exposures are more serious than they probably imagined.

Families that employ domestic workers should be aware that the greater threat of flu is not that employees will call in sick–it is that they will drag their sick selves to work. A Cornell University study found that going to work in a contagious state–what human resources experts call “presenteeism”–accounted for 60% of the total cost to employers from employee illnesses. Recent figures put the annual cost of presenteeism to U.S. employers at anywhere from $150 billion to $250 billion.

From exchanging business cards to using the same salt shaker in the lunchroom, the possibilities for transferring viruses in the workplace are numerous. These same concerns exist in domestic work settings, but to an often higher degree. Many office workers who take ill can attend to pressing work matters from home, for example, via telecommuting. Sick domestic employees, meanwhile, do not have that luxury. Rooms must be dusted; groceries put away, mail collected. This contact with personal property allows flu to rapidly cycle through the employer’s home.

At the same time, employers often contend with more than a few family members bringing home a virus from work or school. They can have one or more domestic workers also bringing in a flu contracted from spouses or children or coworkers at a second job. That creates an exponentially larger web of communicability inside the client’s home. Also, the uniquely skilled and experienced domestic worker (personal chef, nanny) is not likely to have someone on staff that can readily step into their shoes. This creates extra pressure to work sick rather than disappoint an employer in a bind.

More importantly, if a flu victim happens to be one of the 57 million American workers who receive no sick benefits, calling in sick may mean sacrificing much-needed pay. In this scenario, flu-bitten domestic employees feel more pressure to take their viruses to work. This is a serious concern for several reasons. Domestic workers often have direct in-home contact with–and specific duties caring for–the very young and very elderly, the two demographic groups most susceptible to flu.

A toddler or aging parent with flu could trigger a major family medical crisis. Just as worrisome is the prospect of a houseguest being sickened. New flu strains are making it harder to say who is at elevated risk, too. Take older teens and younger adults. With their strong immune systems, both tend to resist the worst a seasonal flu can dish out. Yet the American Journal of Roentgenology found the new H1N1 virus seriously sickens many of them. It also found H1N1 could cause “unusual” lung damage such as pulmonary emboli in patients. Without the added early-detection step of an X-ray, and treatment with a specific antiviral therapy, the condition can easily turn fatal.

The wisest course for households with an active flu bug may be to postpone plans to entertain anyone who has yet to be exposed to either seasonal flu or the H1N1 virus. Likewise, guests who visited just before an employee or family member first began to show symptoms should be told they might have been exposed to the virus in its early contagious stage.

A best practice to consider would be to create a well-defined sick and personal time policy to help set expectations for domestic employees. This policy should be clearly spelled out in a human resources manual distributed to all domestic employees. The policy goal is to: (a) prevent spread of serious contagions like flu in the household; and (b) make clear to employees their rights and obligations should they wish to stay home to care for themselves or ill family.

Figuring out what constitutes an appropriate amount of sick/personal time to offer, and the preconditions for letting employees take that time, are matters best hammered out with an attorney or employment liability insurance expert. And although there is no legal obligation to give employees paid time off, it can be a smart move. Properly structured, the benefit can save far more than it costs over time by curbing both the initial spread and long-term cycling of illnesses among coworkers and family members. Another smart move would be to establish a contingency plan for how staff would reconfigure and redeploy in the event that some of them were absent for a prolonged period due to flu or other illness. Such a plan can ease disruption of normal household operations and make contagious employees feel less pressure to come in when they should be home in bed.

Beyond having a formal sick/personal leave policy, those in the position of supervising family or staff should take care to actively communicate and evenly enforce the policy’s written terms and conditions. When a domestic employee feels that a written policy was arbitrarily enforced, a retribution-free forum for airing and documenting grievances should be in place.

In the case of flu, a few standard rules apply in objectively determining what constitutes sufficient leave time. Some flu sufferers (children, the elderly, and those whose immune system are already compromised by other chronic illnesses) can retain and spread the virus for many weeks. But the CDC finds the window of communicability more typically ranges from one to four days.

The CDC also cautions workers who have flu symptoms to stay home until they have been fever free at least 24 hours. It should be noted, however, that certain people with flu never get a fever. In light of this, the best protocol for allowing domestic employees to safely return to work might be to require a doctor’s note giving them clearance.

Andrew McElwee is EVP of Chubb & Son and COO of Chubb Personal Insurance.


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