In extreme weather, safety concerns, closed roads, and states of emergency might lead you to shutter your business temporarily. But do you have to pay your employees while you're waiting for the storm to pass?
Today we're talking about pay issues for work missed due to bad weather. It’s a complex topic, with lots of variables, most importantly the employee's exempt or non-exempt status.
Who’s ‘Exempt’ and Who’s Not?
So who's exempt and who's non-exempt? Exempt employees are "exempt" from—meaning they’re not subject to—the minimum wage and overtime pay requirements of the federal Fair Labor Standards Act, or FLSA.
To be exempt, employees must be bona fide executive, administrative, professional, outside sales, or computer employees. The law contains additional tests, including a salary test, to determine whether employees are exempt. Under the salary test, to be exempt, an employee generally must be paid a weekly salary that is above the minimum threshold amount contained in the law.
Exempt Workers Usually Must be Paid
So, once you've established who's exempt, do you have to pay these employees when you shut down for weather reasons? Usually, yes. In most cases, exempt employees must be paid their full salary if they perform any work during a work week.
However, if your business remains open during bad weather, and an exempt employee chooses not to report, you may deduct the day's pay from that person's paycheck, but only for full-day absences. If an exempt employee performs any work at all, he or she must be paid for the day.
Non-Exempt Workers Paid Only for Time Worked
What about non-exempt employees? These are workers who are protected by the minimum wage and overtime requirements of the FLSA, and who are usually paid on an hourly basis. Generally, non-exempt employees are paid only for time worked, meaning they do not have to be paid if the worksite is closed for bad weather.
Watch for ‘Reporting-Time-Pay’ Laws
Some state laws and regulations require employers to pay employees for showing up—even if there is no work that can be performed (such as when the office is closed) or the employee is sent home early (for instance, due to an impending storm). These laws, often referred to as "reporting-time-pay" laws, may apply to specific industries or certain employees only, so check with your state labor department for exact details. State law may also protect workers from being disciplined for failing to report to work during events such as road closures and declared states of emergency. Again, check with your state labor department to learn which of these laws apply to you.
Recognizing that weather is beyond our control, some employers choose options that don’t financially penalize employees for closings. These alternatives include paying employees at their regular rate for time lost due to weather. Or the employer will allow the employee to use personal or vacation time, or to make up time or lost shifts.
Another choice that makes the closure easier on the employee is to arrange for the employee to work from home for full pay. If you chose the work-from-home option, make sure you make it clear how much work should be produced, and whether and how the employee must be available to supervisors, colleagues, clients, customers, and others during the day.
Communicate Your Policy
Winter storm pay policies and work options should be outlined as part of an overall inclement weather policy, which should also include information on how employees will be notified of closures. This plan should be provided to all employees, and administered consistently.