Many business closed early on Tuesday in response to the winter storm. Now that you’ve survived the commute home, you may be pondering whether your company must pay employees for time they missed from work due to inclement weather. The legal analysis has many permutations, but is fairly straight-forward. However, whether (or not) your company pays employees who leave early, come in late, or stay at home can have implications on the company’s culture and employee morale.
The Legal Considerations
From a legal perspective, whether you must pay employees that miss work due to winter storms depends on whether the
(1) employee is exempt or non-exempt from overtime
(2) employer is open for business
(3) employer was open for business … but closed during the workday
The Company Is Open for Business and the Exempt Employee Misses the Full Day:
Under the Fair Labor Standards Act, exempt employees “must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked.” Section 13(a)(1); 29 C.F.R. 541. The issue here is that you do not want to risk losing an employee’s exempt status by docking the employee for time missed due to weather-related absences. However, in an October 28, 2005 opinion letter, the Department of Labor noted that under the FLSA, employers may make such a deduction if the company is open for business all day, and the employee cannot (or chooses not to) come to work due to a storm.
Company Is Open for Business and the Exempt Employee Misses a Partial Day:
On Tuesday, many businesses gave their employees the option of leaving in the afternoon to get an early start on the evening commute. If an exempt employee chooses to leave early – even when the company stays open – the employer cannot deduct any money for the partial day’s absence. According to the October 28, 2005 opinion letter, “if an employer remains open for business during adverse weather emergencies, the employer may make deductions for full-day absences only, from the pay of an otherwise exempt employee who chooses not to report for work for the day(s) because of the adverse weather emergencies.”
The Company Is Closed for Business (Full or Partial Day, but Less than a Full Work Week):
The employer can deduct from an exempt employee’s pay for a full day’s absence if the absence is due to “personal reasons” such as not being able to get to, or stay at work due to inclement weather. The analysis changes when the company decides to close the business. “If the employer closes operations due to a weather related emergency or other disaster for less than a full workweek, then the employer must pay an exempt employee” his or her full salary. Why? Because “deductions may not be made for time when work is not available.”
The Company Is Closed for Business For a Full Work Week or More:
To add yet another wrinkle, the analysis changes yet again if the business closes for a full work week or more. In such a case, the employer need not pay the exempt employee.
May an employer force an exempt employee to use paid-time-off?
Yes. According to an October 24, 2005 Department of Labor opinion letter, an employer can require an employee to use his or her paid time off if the employee is absent from work due to the office closing or who misses part of a day due to inclement weather. Why? Company’s need not grant paid time off to employees. If an employer chooses to do so, it can dictate the terms of its use.
Non-Exempt Employees – The Company Is Open or Closed for Business:
According to the Department of Labor, the FLSA “does not require employers who are unable to provide work to employees due to a natural disaster to pay non-exempt employees for hours the employees would have otherwise worked.”
Non-Exempt Employees – The Company is Open for Business…But Then Closes
In Massachusetts, things change for non-exempt employees when the non-exempt employee (1) is scheduled to work three or more hours; (2) reports to work on time and is ready to work; and (3) is sent home by the employer before his or her scheduled hours have concluded. 455 CMR 2.03(1). In such cases, the employer must pay the employee for at least three hours at no less than $8.00 per hour. See, 455 C.M.R. §2.03(1), the Reporting Pay requirement.
Here’s an example. Let’s say the company is open for work, but at 9:30 a.m., management decides to close the company due to an impending storm. The employer must pay any non-exempt employee who has arrived at work at his or her regular rate for the time worked, plus minimum wage for the remainder of three hours. Again, however, query the impact on morale if the employer chooses not to pay the employee for the full day.
The Business Considerations
Often times, the law is the floor and employers provide more to their employees than that to which they are legally required. Providing paid-time-off is one such example. Another is paying employees when the employer shuts down due to weather or other natural disasters. For morale reasons, most of the employers with whom I work take the following approach – and do not distinguish between exempt and non-exempt employees:
- Require employees to use PTO if the employer is open for business but an employee cannot (or does not) come to work
- Pay employees their regular rate if they are scheduled to be at work during a weather-related business closing
- This means that during an office-closing, an employer would expect someone who works from home to continue working from home if able to do so (i.e. power has not been lost)
- The employer would not credit vacation days or other PTO if the employee previously was scheduled to be out of the office.
Of course, each employer must decide what makes most sense given their business environment and economic limitations.
- An employer that remains open for business during a weather emergency may lawfully deduct one full-day’s absence from the salary of an exempt employee who does not report for work for the day due to the adverse weather conditions.
- An employer may not deduct an exempt employee’s pay for a partial day’s absence.
- If the employer closes operations due to a weather related emergency or other disaster for less than a full workweek, then the employer must pay an exempt employee his or her full salary.
- If the employer closes operations due to a weather related emergency or other disaster for a full workweek, then the employer need not pay an exempt employee for the missed week of work.
- Employers need not pay non-exempt employees for hours they do not actually work.
- Massachusetts observes an exception to this rule when an employee shows up to work and the office later closes. In such a case, the employer needs to make sure that the employee is paid for at least 3 hours of work at minimum wage. Thus, if non-exempt employees show up for work because the company has not been able to communicate that the office is closed, the employer must pay all such employees at least $24, which represents minimum wage ($8/hour) for three hours.