Winter has officially arrived. While school children look forward to “snow days” as a chance to play hooky, inclement weather closures can often wreak havoc on businesses and their employees, causing lost productivity, lost revenue, and general workplace disruption. Unfortunately, snow, ice, hurricanes, mudslides, earthquakes, and other natural disasters can also create legal exposure if employees are not properly compensated during this down time. This Client Alert offers a brief guide on avoiding that exposure and explains the basics of compensating employees under the Fair Labor Standards Act (FLSA) during times of inclement weather or other disasters.
In general, whether an employee must be paid during times of inclement weather depends on two factors: (1) whether the employer voluntarily closed the business, and (2) whether the employee is classified as exempt or non-exempt under the FLSA. Employers are wise to revisit these factors any time inclement weather strikes.
When the Employer Closes the Business
If an employer voluntarily closes its doors during inclement weather, exempt employees are generally entitled to their full, regular pay for the entirety of the closing, regardless of whether the employee has performed any work during that time. If, however, the business is closed for longer than one full workweek, the employer is not required to pay exempt employees as long as the employee performs no work. Of course, any amount of work performed from home, even if only a few hours, entitles the exempt employee to his or her full salary.
Non-exempt employees, on the other hand, may be treated differently. Under the FLSA, non-exempt employees are only entitled to wages for hours of work actually performed. Thus, an employer is not required to pay any wages to non-exempt employees when the employer closes due to inclement weather. An employer does, however, have discretion to pay the employee’s normal wages, as the closure is due to no fault of the employee, or to allow the employee to use paid time off (PTO) during the closure.
A fair warning—some state and local laws require employers to pay its non-exempt employees call-in or reporting time pay depending on the circumstances. Thus, before finalizing policies and procedures for pay during inclement weather, consult your applicable state and local laws to ensure compliance.
When the Business Remains Open
Oftentimes a business is able to open its doors during inclement weather, but its employees are not so eager to brave the elements while commuting to work. In those instances, the rule does not change for non-exempt employees—the employer must only pay for time actually worked. If a non-exempt employee chooses to stay home despite the opportunity to work, the employer is under no obligation to pay that employee under the FLSA.
The same is true for exempt employees. If the business is open but an exempt employee chooses to stay home, the employee is generally not entitled to his or her wages so long as no work is performed that day. If the employer has in place a PTO policy, the exempt employee may use PTO to cover his or her absence. If the employee has no PTO available, then the employer may reduce the employee’s pay in full-day increments.
As always, if an exempt employee performs any amount of work from home, including answering emails or taking phone calls, the exempt employee is entitled to his or her full salary for the day. In this scenario, the employer may make deductions from the exempt employee’s PTO bank for time not worked, but the employee must still be compensated for the entire day, even if he or she does not have enough PTO to cover the time spent not working.
Implementing an Inclement Weather Policy
Before inclement weather strikes, employers should ensure they have an informative and sufficient inclement weather policy in place. Generally, a good policy includes:
What constitutes inclement weather;
How employees will be compensated;
How work responsibilities will be covered;
How employees will be contacted about closings; and
Guidelines for employees who cannot get to work when the business remains open.
An appropriate inclement weather policy should inform employees of what to expect during inclement weather and provide guidance to supervisors and managers on making closing decisions and ensuring that all employees are appropriately compensated.
If your organization has questions regarding any of the above information, please contact your Kutak Rock attorney, the authors of this alert below, or any other members of our National Labor and Employment practice.