With winter on the way, it is a good time for employers to review the relevant wage and hour laws that can be triggered by inclement weather. Likewise, it is also a good time for employers to ensure their policies comply with these laws when weather causes a temporary workplace interruption.
Paying Exempt and Nonexempt Employees During Workplace Interruptions
Generally, exempt employees are paid on a salary basis, meaning they must be paid the same amount each week they perform any work, without regard for the quantity or quality of the work they perform. The federal regulations make clear that an employee is not paid on a salary basis if deductions are made for "absences occasioned by the employer or by the operating requirements of the business."
The U.S. Department of Labor (DOL) takes the position that exempt employees still need to be paid their full weekly salary if their employer closes the facility for a day or two due to inclement weather because the employees are ready, willing, and able to work, but work is not available. If, on the other hand, the business remains open but an exempt employee chooses not to report due to inclement weather, his or her employer can make a deduction from salary, but only in full-day increments. If an exempt employee comes in late or leaves early due to inclement weather, he or she must be paid for the entire day. However, the DOL does permit the employer to make partial-day deductions from the exempt employee's available paid time off, subject to the terms and conditions of the employer's policies and applicable state and local laws.
If the employer closes for a full workweek, exempt employees need not be paid their weekly salaries, unless they perform compensable work with the employer's knowledge. Conceptually, courts and the DOL have endorsed the idea that infrequent and insignificant periods of work need not be compensated, but there is no bright-line rule. This so-called "de minimis doctrine" has eroded somewhat as technology has advanced. Further, the doctrine has been called into question under state law in a number of jurisdictions, including California.
In contrast, at the federal level and in most jurisdictions, nonexempt employees get paid only for the hours they actually work. So if a nonexempt employee does not report for work due to inclement weather, he or she does not need to be paid, even if the employer closes the worksite for the day.
Reporting-Time and Predictive Scheduling Regulations
Sometimes referred to as "fair scheduling laws," reporting-time and predictive scheduling laws are part of a recent trend of state and local regulation focused on lower-wage industries such as hospitality, retail, and food service, where schedules can fluctuate at a moment's notice based on customer demand. Employers should consider these laws in shaping their weather-closure policies and procedures.
Reporting-time or show-up pay generally refers to a minimum number of hours that must be paid to an employee who reports for work but is sent home early. Although this is not required by federal regulations, a number of jurisdictions, including California, Connecticut, Massachusetts, New Hampshire, New Jersey, New York, Oregon, Rhode Island, and the District of Columbia, have laws and regulations on this issue.
Not all employees are entitled to pay under these reporting-time or show-up pay laws. For example, some jurisdictions limit such compensation to nonexempt employees or to employees in certain industries. Additionally, the amount of time and the rate at which an employee is entitled to compensation differs across jurisdictions. Although the details and terminology vary, many of these laws do not require reporting-time pay for early dismissals from work that are prompted by events beyond the employer's control, such as snowstorms, flooding, and acts of God.
Predictive scheduling laws typically require employers to provide advance notice to employees of their work schedules and timely notice of any changes made to those schedules. These laws exist in a limited number of jurisdictions, including San Francisco; Emeryville, California; San Jose, California; New York City; Oregon (statewide); Seattle; and the District of Columbia. While each law has its own particularities, most apply to retail and food service employers, and carve out changes made due to natural occurrences outside of an employer's control, arguably including inclement weather.
Telecommuting may also trigger an employer's responsibility to pay an employee, even if the employer closes due to inclement weather. If an employer knows or has reason to know an employee is working from home when it has closed operations due to inclement weather, it must pay the employee for the work performed. A nonexempt employee need only be paid for the actual amount of work performed. An exempt employee who does not report for work when the business is open due to inclement weather would be entitled to pay for the entire workday, and thus the full weekly salary, if he or she performed any work from home with the employer's knowledge. In the event the employer prohibits telecommuting, the employer must still pay the employee for work it knows or has reason to know an employee is performing, but it may also subject that employee to discipline for breaking company policy.
Employers may want to take proactive steps to be prepared for unexpected events that may threaten business continuity. This is not limited to inclement weather. Natural disasters, power outages, and pandemic illnesses can also significantly impact workplace attendance. Having policies and procedures in place to address these issues can improve employee safety, ensure legal compliance, and minimize disruption to business operations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.