Inclement Weather and Payroll
With much of the country digging out from major blizzards, employers have many questions regarding payment for employees during inclement weather, and reporting time pay. Last week www.humanresourceblog.com was inundated with questions from employers regarding these timely issues. The same rules apply for blizzards, thunderstorms, power outages, dust storms, mudslides, hurricanes, floods, earthquakes and other natural disasters.
Every employer must consider a number of factors in deciding whether to close the business during inclement weather. Factors to consider include demand, providing a needed service to the community, potential loss of revenue, cost of continued operations and worker safety.
State laws regarding business closures during inclement weather vary, but in most states, the relevant statute is the federal FLSA, the Fair Labor Standards Act. Under the FLSA, hourly employees need to be paid only for hours worked. If the business is closed for the day, and hourly employees stay home, they are not entitled to any payment for the day. A generous employer may allow workers to use a vacation day to receive payment for a “snow day”, but there is no law that the employer must do so. The same rules apply to non-exempt salaried employees.
Different rules apply to exempt employees during a business closure. Under the FLSA, an exempt salaried employee who is ready, willing and able to work (and has worked at least a few minutes during the payroll week) must be paid his or her usual salary each day, even if the employer has no work for the employee. In practical terms, this means that when the business is closed due to inclement weather, the exempt employee must still be paid for that day – unless the exempt employee indicates that he or she is not available to work on that day.
In addition, an exempt employee who does any work at all during the day, even making business calls from a cell phone or checking her email from home, must be paid her entire salary for the day. Therefore, an exempt employee who stays home on a snow day but does an hour or two of work, is entitled to her entire salary for the day.
There is an exception under the FLSA when the business is closed for an extended period according to the HR advisors at SHRM, the Society for Human Resource Management. This sometimes occurs in the wake of a natural disaster like a flood, hurricane or severe thunderstorm that causes an extended power outage. An exempt employee who does no work at all during the payroll week need not be paid for that week. This is true, even if it is the employer’s choice that the worker does not work that week. Therefore, a business that is shuttered for an entire payroll week need not pay exempt employees.
Business Open during Inclement Weather
When the business is open during inclement weather hourly employees are entitled only to payment for time actually worked in most cases. Generally speaking an employer can discipline an employee who fails to report to work as scheduled during inclement weather (although, depending upon the circumstances, employers may decide to be more lenient.) There are some exceptions under various state laws. For example, Delaware recently passed a law that an employee who stays at home when the governor has declared a state of emergency need not be paid for the time missed, but cannot be disciplined for the absence. The law went into effect in October 2010.
Special rules apply in many states when an hourly employee reports to work but is sent home early due to inclement weather. Check back next week for more on reporting time pay laws in the various states.
When the business is open, any exempt employee who reports to work must be paid. However, an exempt employee who does not report to work due to inclement weather is not available for work. This can be treated as a day off for personal business under the FLSA, and the exempt employee need not be paid for the day. Many employers are surprised to learn that under the FLSA, an exempt employee who takes a full day off work for a reason other than sickness or disability need not be paid for that day.
Again, an exempt employee who works any portion of the day, even a few minutes, even from home, is entitled to his or her usual salary for the day. In some cases, the employee can be disciplined for not reporting to work as expected, but must still be paid.