MiddleGround Capital Will Pay Workers Recovering from Coronavirus
The manufacturing-focused investor will continue to pay employees, including hourly workers, at its portfolio companies who test positive for the flu or the coronavirus.
For many salaried employees in the U.S., the spread of the coronavirus will mean traveling less and working remotely, but the impact on hourly workers and those who can’t do their jobs from home is far less clear.
To remove that uncertainty, private equity firm MiddleGround Capital announced on Monday that all employees across its portfolio companies who test positive for the flu or the coronavirus will continue to be paid while they recover.
The policy applies to all of the approximately 3,000 employees, including hourly workers, at MiddleGround’s five platform companies. The firm, which has offices in New York City and Lexington, Kentucky, invests in lower middle-market manufacturing businesses in North America.
MiddleGround Partner John Stewart says the policy was designed to protect workers financially should they fall ill and to encourage those with symptoms to stay home, so as to not spread the virus.
“Most hourly workers don’t have an extra $500 set aside for an emergency,” says Stewart, who began his career as an hourly line worker at Toyota Motor Corporation. “When you’re sick, you go to work to make money.”
Companies across the portfolio have instituted additional safety measures, including washing communal areas after breaks and staggering breaks and lunches to reduce the number of employees convening at one time. Supervisors now walk the floor at the beginning of a shift to monitor for symptoms.
Because of its focus on North America, MiddleGround’s portfolio companies haven’t experienced much supply chain disruption, according to Stewart. The bigger risk is around employees, who could face financial distress if they’re unable to work, or contract the virus from a sick co-worker who couldn’t afford to stay home. The new policy, developed in collaboration with management, is intended to mitigate both scenarios.
To date, none of the portfolio companies’ employees have tested positive for coronavirus, according to Stewart, who says the move was a proactive measure.
MiddleGround was ahead of McDonald’s, Walmart and other large corporations that announced new paid sick-leave policies earlier this week.
“We think it’s the right thing to do,” Stewart says. “Frankly, I hope others in the private equity community will step up to the plate here.”
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Kathryn Mulligan is the editor-in-chief of Middle Market Growth.