Last week’s “polar vortex” brought record low temperatures to many parts of the country and shut down offices in numerous cities. Estimates suggest that the frigid weather could cost the U.S. economy up to $5 billion. We have written during previous states of weather emergency (Hurricanes Sandy and Irene) about potential wage and hour compliance issues during inclement weather. As much of the country is still in the early days of winter, though, now is a good time to revisit these issues and to stress the importance of establishing inclement weather policies.
If an employee (either exempt or non-exempt) works remotely during inclement weather, regardless of whether the office is open or closed, the employer must pay the employee their base salary (for exempt employees) or at their regular hourly rate for all hours worked (for non-exempt employees).
Generally, under the Fair Labor Standards Act, employers must pay exempt employees on an inclement weather day, even if they close the office as long as the employee was ready able and willing to work. An employer may deduct a full day from an exempt employee’s pay however, if it opens the office and the employee misses work because of the weather. In the rare instance where inclement weather forces an employer to close a business for the entire week and exempt employees perform no work during that week, the employer need not pay its exempt employees.
Employers who improperly deduct pay from an exempt employee under these circumstances risk losing the exempt status for that employee. Generally, though, improper deductions that are either isolated or inadvertent will not result in loss of the exemption if the employer reimburses the employee for such improper deductions.
Notably, an employer may require an exempt employee to use his or her paid time off during an inclement weather day. (Whether this is a sound business practice is another story.) If the employee does not have enough accrued time off to cover the day, though, the employer may not deduct from the employee’s salary.
Under the FLSA, employers are only required to pay nonexempt employees for actual hours worked. Thus, an employer is not required to pay nonexempt employees for non-working time, even if the employee was scheduled to work and was sent home early. Thus if an employer closes early due to inclement weather, the employer need only pay nonexempt employees only for the time spent working.
Some states, though, including Massachusetts, California, Connecticut, New Hampshire, New York and Rhode Island, as well as the District of Columbia have reporting time pay laws, which provide some guaranteed pay for nonexempt employees who come in to work only to be sent home. Employers should review whether these laws apply during inclement weather. For example, California has an exception to the reporting time requirements for “acts of God,” and New Hampshire exempts employers who make a “good faith effort” to notify employees not to report to work. Employers should aim to notify employees as early as possible of closures to avoid these requirements. If reporting time pay laws do apply, employers must review state laws to determine how much guaranteed pay it must provide to a nonexempt employee.
Inclement Weather Policies
It is best practice for all companies to have an inclement weather policy that addresses:
What constitutes an inclement weather day;
How and when the company will notify employees of office closures and early closings related to inclement weather days;
Whether and how exempt employees will be required to use paid time off during inclement weather;
Guidelines for employees who are able to work from home (including how to report their time for non-exempt employees); and
Instructions for employees who are unable to get to work safely.