When Hurricanes Cramp Your Business Style – Paying Employees in Weather Emergencies
When everyone’s phone issues that loooong beep indicating a hazardous weather warning or when you see Jim Cantore in your local airport, you know that weather could possibly affect your workplace. With hurricanes and tropical storms beginning to make landfall, we are re-posting this past group of tips on how to deal with extreme weather. We hope everyone stays safe.
Hurricanes, Blizzards, and That Dreaded TORCON Index
Many “it was the worst day of my life” stories begin with a weather event. I will never forget sitting with a client in an early April morning mediation in 2011 when she received a call on her cell phone. She was told that she should not come to work that day. And that the company’s entire fleet of service trucks had just been wiped out. It was a very bad tornado day for her and all of Alabama. Now, at the beginning of another storm season, we have been receiving questions across our offices about how to handle pay for company closings, late openings, and “y’all go home.” Here are some things to consider:
Pay for hourly employees during weather disasters is fairly simple. Hourly employees must be paid for all hours actually worked. If employees do not come in, are turned away at the door, or are sent home early, the rule is the same – pay hourly employees for hours actually worked.
In this age of remote login, PDAs, and perhaps just running business-related errands while the office is closed, however, employers must beware. Hourly employees must be paid for all time actually worked. This includes time working away from the company’s time clock or login procedure.
Employers are not required to pay “show-up” pay under most state laws. These include the Southern states. Some Northeastern and Western states do have show-up pay requirements contained in their state laws. If your business is operating there, you should check state laws for those requirements and any exceptions to them, such as one that results from timely and effective notice of a closing by the company.
Salaried employees, to retain their overtime exemption, must be paid their full salary in any week in which they perform any work. Thus, a closure for that approaching storm front will not allow an employer to deduct any percentage of a salaried employee’s pay for the hours not worked.
There basically are three exceptions for inclement weather to this rule for salaried employees. First, if the employee has a paid-time-off (PTO) plan, the employer may require the employee to use some of his or her PTO time for a weather-related closure. In this instance, the salaried employee obviously continues to receive full pay (but some of it comes from the PTO bank). The second exception is that an employee need not be paid his or her salary in any work week in which no work is performed. This exception would apply to the more severe Katrina-like disasters. So, if the office is closed the entire week, you do not have to pay even your exempt employees who performed no work. Finally, employers may deduct for full-day absences, but only full-day absences, if the business is open and the employee is unable to get to work due to the weather (this would be like an unpaid personal day for something other than sickness or disability).
In addition to considering federal and state wage-and-hour laws, do not forget about contractual requirements that could impose greater obligations on the company than do these laws. Individual employment contracts could contain such provisions, as could collective bargaining agreements (CBAs) in union settings. CBAs, for example, often contain show-up pay provisions and have restrictions on mandatory use of PTO.
Working from Home
As mentioned above, all employees, hourly and salaried, must be paid for all time worked. This includes time worked from home or any other “offsite” location. Employees with PDAs (and old-fashioned toolboxes) must be monitored for actual work performed when the employer’s business otherwise is closed.
What to Do with the Superstar Who Came in Every Day
Bonuses are allowed but not required. Gift cards and spa treatments are great alternatives. Just remember, though, that for the purpose of calculating overtime pay in a given workweek, all remuneration must be included in the base rate before multiplying that rate by time and a half for hours worked over 40.