Addressing Employee Pay Issues Driven by Mother Nature
By Laura Kerekes
Spring has sprung! Those super storms that packed punches in the Midwest and Northeast to start the New Year are continuing to add to the area’s already taxed weather relief efforts. But, regardless of where your company is based or if you’ve been affected by these recent storms, it’s critical to be prepared and have a plan to handle employee relations and pay issues that may arise if your business is forced to close due to inclement weather – whether it’s a hurricane, tornado or late spring snow storm.
So, what should an employer do? Pay employees to stay at home or dock their pay? After all, in most cases, missing work due to weather is not their fault. However, many businesses don’t have the financial resources to pay employees that are unable to come into the office and/or don’t have the option to do their jobs from home.
From an employee relations perspective, the more generous you can afford to be to those employees suffering as a result of a weather-related disaster, the better. Employees (and their families) do pay attention to how they are treated, and a little extra time off and compassion for individual circumstances can go a long way towards enhancing employee loyalty. To help guide employers, here are some practical tips and rules of thumb for paying employees who miss work due to Mother Nature.
Q: Does a company have to allow employees to work from home (exempt or nonexempt) if the office is closed due to bad weather?
A: No, the employer does not need to allow employee to work from home, regardless of their FLSA status (exempt or nonexempt). The employer can make those decisions based upon the work that can be done remotely and based on the needs of the business. The employer should have clearly communicated policies and expectations regarding working from home during office closures.
The bottom line is that every employer should think about the needs of the business, its financial resources, and employees’ needs and have plans in place to manage business issues due to inclement weather. Thinking through what the wage and hour laws require and developing your policies and then applying them consistently and fairly with all employees can reap huge dividends in employee loyalty and retention.
Q: If the company has no power and sends employees home for the day, should they be paid? And does it matter if the employee is exempt or nonexempt?
A: In general, there are two sets of rules for paying employees depending upon their classification under the Fair Labor Standards Act (FLSA) as it relates to eligibility for overtime. With nonexempt employees (those eligible for overtime pay), there is no obligation under federal or state law to pay for time not worked. However, under certain state laws, employers may have an obligation to compensate nonexempt employees under call-in/reporting pay laws, especially if the employees were not advised that they should not report to work and were denied work upon arrival at the workplace.
These pay obligations vary by state. With respect to salaried exempt employees who must be paid on a “salary basis” under the FLSA, employers may not make salary deductions for absences that result from an employer’s partial-week closing of operations, including closings due to weather-related emergencies or disasters. The bottom line is that exempt employees must be paid their full salary if they perform any work in a workweek and only miss work time due to the employer’s closure of operations. Closures for a full workweek need not be paid if no work is performed.
Q: Are these rules different if the company can tell the employee not to come to work the next day?
A: For nonexempt employees, if they are told in advance not to come to work and the employees stay home, then the employer is under no obligation to pay them for the time off. The employer and the employee can choose to use accrued paid time off to compensate the employee for the missed workdays.
For exempt employees, the “salary basis” rule still applies. In some cases the employee may be working from home during the bad weather days. If state laws permit employers to do so, employers may deduct from the exempt employees’ accrued paid time off balances to resolve the issues related to “salary basis” compliance. The employer should ensure, however, that these employees have not done any work from home during the office closure prior to deducting time from the accrued paid time off bank balances.
Q: If an employee is on Family and Medical Leave Act (FMLA) leave, do those “bad weather days” count against the employee’s 12-week allotment of time off?
A: The FMLA regulations are silent about bad weather office closures. However, the regulations do allow for situations when the employer’s business stops operating for a period of time and employees are not expected to come to work (plants closing for a few weeks to retool, mandatory company-wide summer vacation, etc). In that case, the week the business is closed and no employees are reporting to work would not count against the employee’s FMLA leave entitlement. If the business is closed for a shorter period of time, the general thinking is that the FMLA regulations relating to holidays would likely apply. Under those rules, if the business is closed for a day or two during a week in which the employee is on FMLA leave, then the entire week would count against the employee’s FMLA leave entitlement. If, however, the employee is on intermittent FMLA leave, then only the days that the business is closed and the employee is expected to be at work would count against the leave entitlement.
Q: How do we handle attendance issues where the office is open but public transportation is not available due to the weather and employees cannot come to work?
A: If the business remains open but employees cannot get to work because of the weather, employers will need to consider their own attendance policies and practices in determining what flexibility to give employees as it relates to attendance. Employers may encourage employees to car pool or assist them in establishing alternative methods of transportation to get to work.
Under the FLSA rules as it relates to pay, however, employers do not need to pay nonexempt employees if they perform no work. For exempt employees, if the business remains open but an employee cannot get to work because of the weather, an employer can deduct an exempt employee’s salary for a full day’s absence taken for personal reasons without jeopardizing the employee’s exempt status. Employers cannot, however, deduct an exempt employee’s salary for less than a full-day absence without jeopardizing the employee’s exempt status.
Laura Kerekes is the Chief Knowledge Officer for ThinkHR. She applies her extensive human resources and general management experience to a broad range of services for her clients, including: strategic HR consulting, interim human resources executive assignments and compliance/OD/training. Contact her at firstname.lastname@example.org. Follow her at @ltkerekes.