As winter once again approaches, employers, particularly those in cold-weather states, face the recurring specter of inclement weather affecting business operations and employee attendance. While the weather may create stress and disruption for a business and its people, employers must not lose sight of the fact that the rules governing how you pay your employees continue to apply throughout any weather event.
There are five main rules that employers need to keep in mind when bad weather strikes:
1. If a business closes for any amount of time less than a full workweek, it must continue to pay its salaried exempt employees.
With a few exceptions, including certain doctors, lawyers, and teachers, salaried employees subject to the executive, administrative, or professional exemption under the Fair Labor Standards Act must receive their full salary for any workweek in which they perform any work. See 29 C.F.R. § 541.602(a)(1). “An employee is not paid on a salary basis if deductions from the employee’s predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business. If the employee is ready, willing and able to work, deductions may not be made for time when work is not available.” Id. § 541.602(a)(2).
The so-called “salary basis” regulation allows employers to make deductions from an employee’s salary under certain circumstances, including “when an exempt employee is absent from work for one or more full days for personal reasons, other than sickness or disability.” 29 C.F.R. § 541.602(b)(2). Each year, this regulatory language trips up many employers who rely on that provision to make salary deductions when weather forces a business closure.
The Department of Labor has long concluded (see opinion letters from October 24, 2005 and October 28, 2005) that an employee’s absence resulting a business closure due to inclement weather is not an absence “for personal reasons” under section 541.602(b)(2), and thus a salary deduction for such an absence is inconsistent with the regulations and may jeopardize exempt status. This is because when the employer has closed and is not making work available, it is the employer’s choice—not the employee’s—whether to come to work.
2. An employer may, at least under federal law, require a salaried exempt employee to use accrued paid time off to cover absences due to business closure caused by inclement weather.
Although an employer must generally continue to pay salaried exempt employees during a weather-related closure, the Department of Labor does not draw a distinction between paying an employee from a salary account and paying from a paid leave account. So long as the employee receives the dollars called for under the regulations, the source of the dollars is immaterial.
Thus, to the extent that an employee has accrued paid time off available to cover some or all of the unworked hours resulting from the business closure, an employer may require that the employee use paid time off to account for the hours not worked. If, however, the employee has insufficient paid leave available to cover the entire absence, the employer must still pay the employee in accordance with the regulations. For example, if the employee has twelve hours of paid time off available and the business closes for two full days, the employer may require that the employee use all of the accrued time, and then the employer would have to pay the remaining four hours’ worth of salary.
3. If an employer remains open for business and allows employees to come to work, but a salaried exempt employee chooses not to report to work for one or more full days because of the weather, the employer may make a salary deduction for that absence.
When an employer remains open notwithstanding adverse weather conditions, as is often the case for hospitals and other types of operations that do not necessarily have the option of closing because of weather, an employee who chooses not to report to work for one or more full days is absent “for personal reasons.” In that circumstance, the employer may make a salary deduction because of the absence, so long as the deduction is only for full-day absences and not for any partial-day absences.
When weather conditions render getting to and from work physically hazardous, as may occur if roads are especially slippery, employers may want to think carefully before requiring employees to report to work. The last thing any business wants is to have an employee injured or killed getting to or from work, or harming anyone else in the process. Employees facing a pay loss due to not reporting to work may find themselves under pressure to take safety risks that may not be in the employer’s best interest.
4. Employers must pay non-exempt employees for the time they work, and comply with any state or local requirements.
Under federal law, paying non-exempt employees during a weather event is comparatively straightforward: pay them for the time they work. Some state and local laws, however, may require that employees receive at least a certain amount of pay for reporting to work, even if the business closes shortly after they arrive to work. And some laws require that certain employers in particular sectors, such as retail or restaurants, provide at least a minimum amount of notice regarding any changes in an employee’s schedule, with penalties that apply in the event of noncompliance.
5. If an employer requires employees to remain on premises for the duration of a weather event, that requirement may create a risk that the off-duty time becomes compensable work.
Some employers take steps to ensure adequate staffing and to protect employee safety during a weather emergency such as requiring employees to sleep at the employer’s site or preventing employees from going home. Depending on the specific facts, as well as the requirements of state and local law, efforts to exert control over employees during non-working time may convert some or all of that time into compensable work. There may be a significant legal difference between offering to allow employees to remain on premises during off-duty hours for their own convenience so as to spare them a risky commute, versus forbidding them to leave the worksite even though they prefer to go home.
If an employer truly fears that allowing an employee to leave the premises may result in harm to the employee, the employer may still choose to require the employee to stay on site, but that decision may also require paying the employee for that time.
In addition to the five rules described above, employers should remain mindful of any written policies or other promises they have made to their employees that go beyond what the law requires. In addition to complying with the wage and hour laws, employers must, of course, continue to abide by their policies. In the event that an employer has not yet formulated a clear written policy to cover inclement weather, we would suggest that you reach out to us for assistance.