As the Gulf Coast Waits for Tropical Storm Barry, How Can Employers Prepare?

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Residents and employers along the Gulf of Mexico are watching carefully as Tropical Storm Barry approaches New Orleans, expecting to make landfall sometime this weekend. While the storm may not develop into a strong hurricane, it is slow-moving and likely to soak the region in heavy rain as it travels inland. Combined with strong wind and a storm surge, the storm is expected to cause heavy flooding. Louisiana Governor Jon Bel Edwards has declared a state of emergency and has reminded citizens to check their emergency supplies and plan accordingly. Mississippi and Arkansas are also in the path of heavy flooding and are expected to see dangerous weather circumstances as well.

As the safety of our friends and clients is of paramount importance, we include state and federal links to help those in its path prepare for the storm. Governor Edwards has urged Louisiana citizens to follow several state agencies to stay informed of local conditions and evacuations, including: the Coastal Protection and Restoration Authority (@LouisianaCPRA), the Louisiana State Police, the Governor’s Office of Homeland Security & Emergency Preparedness (@GOHSEP), The Louisiana Department of Health (@LADeptHealth), and the Louisiana Department of Transportation (@La_DOTD).

The Federal Emergency Management Agency (FEMA), and the affected states, have issued general storm and disaster preparedness information. That information is linked below.

After they have given the requisite care to the safety of employees and themselves, employers should look to address some of the typical questions that arise after a hurricane or tropical storm. For example, there may be questions about how to pay employees (exempt and nonexempt) if a work day is cut short or if all work is suspended for a few days. Depending on the severity of the damage, some employers may want to voluntarily continue paying employees their wages (full or partial), which requires forethought and potentially tax planning. Here we discuss 10 matters for employers to consider when preparing for or recovering from a natural disaster.

1.  Calculating the Wages of Non-Exempt Employees

Under the federal Fair Labor Standards Act (FLSA), as well as pertinent state laws, non-exempt workers must be paid only for the time they work. As a result, employers need not compensate non-exempt employees who are not working because of a storm or its aftermath. Notably, it does not matter whether the absence is based on the employer’s decision to close a worksite or the employee’s decision to stay home or evacuate.

There may be exceptions during a weather event for waiting time, or on-call time. For example, the FLSA considers employees to be “on call” if they must remain on the employer’s premises and are unable to use their time for their own purposes. Of the three main states currently in the path of Tropical Storm Barry—Arkansas, Louisiana, and Mississippi—only Louisiana has authority relevant to on-call time. There, employees are only entitled to on-call time compensation if the employer’s policy provides for such pay.1

2. Calculating the Wages of Exempt Employees

When an employer shuts down its operations because of adverse weather conditions for less than a full workweek, exempt employees must be paid their full salary.2 This rule also applies if exempt employees work only part of a day.

If an employer is open for business, on the other hand, an exempt employee who misses work due to the weather situation is considered absent for personal reasons. In lieu of paying salary, an employer with a bona fide leave or vacation policy may require the employee to use his or her accrued paid time off to cover the absence. As long as it is permitted by state law, leave time in this circumstance may be taken in full or partial days.

If an employer has a leave policy, but the absent employee does not have a leave account balance, the employer is not obligated to pay the employee. Unpaid leave, in full-day increments, may be an option for employees who do not have a leave account balance.

3. Reliance on Remote Work

Employers trying to get up to speed after Tropical Storm Barry may choose to consider allowing employees to work remotely (i.e., at home), whether as a long-term or short-term solution. As noted earlier, non-exempt employees must be compensated for all time spent working. Thus, employers must pay non-exempt employees for performing any work done remotely and, moreover, may need to rely on employee self-reporting of hours worked in such a scenario. Exempt employees, too, must be paid their regular salary in this circumstance, unless leave time can be applied for partial days. 

4. Potential Delays in Wage Payments

One possible consequence of a natural disaster such as Barry is the delayed processing of employees’ wage payments. This situation can cause employers to unintentionally run afoul of state law. In Arkansas, for example, a company that employs “salespersons, mechanics, laborers, or other servants” must pay wages no less frequently than semimonthly.3 Also, corporations with $500,000 or more in annual gross income must pay wages for their exempt management-level and executive employees at least once each calendar month.4 In Louisiana, unless an employer has designated another payday, the company must pay wages on the 1st and 16th days of the month, or as close to those days as practicable.5 Finally, in Mississippi, manufacturing employers with 50 or more employees must fully pay for services performed every two weeks, to provide payment for services performed up to 10 days previously.6 Non-manufacturing employers in Mississippi can pay employees on a monthly basis. But for all these requirements, as a practical matter, employers may be unable to process or fund payments to satisfy these requirements, especially in the immediate wake of the storm.

Although some laxity may be afforded to those who experience significant difficulty meeting these types of obligations as a result of the hurricane, it is unclear whether the states affected by Barry will make exceptions to these requirements. Furthermore, if payroll is processed in these states for employees working in other states, it is important to be mindful of those state laws and potential penalties for delayed payment.7

5.  Applicable Leaves of Absences

Employers should bear in mind that employees may be entitled to use certain types of leave to deal with the ramifications of Tropical Storm Barry.

For example, employees who have suffered a serious injury or illness—or who have a family member who did—may be entitled to leave under the federal Family and Medical Leave Act (FMLA). State or local law may also apply to certain employees, but Arkansas, Louisiana, and Mississippi do not have additional state requirements that would apply to medical or family leave.

Certain employees may be eligible for leave as volunteer emergency responders. In Louisiana, an employer may not terminate an employee or cut benefits or seniority after a leave of absence for an employee to serve as a first responder in the Governor’s Office of Homeland Security and Emergency Preparedness, or if the employee must miss work due to an illness or injury after such service.8 The employee is required to provide as much notice as possible regarding the absence and length of the absence. The time away from work does not have to be compensated, but employees may choose to use any available vacation or sick leave.

Employees absent from work to assist with relief efforts may separately qualify for protected time off under federal law. Under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), employees may take a leave of absence for duty in the uniformed services. For purposes of disaster relief, uniformed services include specified service by members of the National Disaster Medical System, appointment of a “System member” of the National Urban Search and Rescue Response System9 into federal service,10 the National Guard if called by the President of the United States, and any other category of persons designated by the president during a time of national emergency.11

Relatedly, to the extent that employers relax enforcement of their leave policies in light of Tropical Storm Barry, they should remain mindful of state and federal antidiscrimination laws. Employers should try to ensure that all exceptions are based on legitimate, non-discriminatory reasons and are consistently applied across the workforce.

6. Duty to Provide Reasonable Accommodations

Additionally, employers in the affected region should be prepared to address employee requests for accommodation. The Americans with Disabilities Act (applicable to employers with 20+ employees) and related state and local antidiscrimination laws require employers to provide reasonable accommodations to qualified employees with disabilities. Because employees who are physically or emotionally (e.g., post-traumatic stress disorder) injured by Tropical Storm Barry’s impact may be entitled to reasonable accommodation, employers should take all such inquiries seriously.

7. Unemployment Benefits

While we hope it does not come to closing offices, employees who are displaced from their positions due to Tropical Storm Barry may be eligible for unemployment compensation from the applicable state workforce commission.12 State unemployment benefits typically run for 26 weeks. The government sometimes has the authority, however, to extend those time limits.

8. Federal WARN Notification

Employers that ultimately decide to close a facility, or implement a mass layoff, due to the storm’s effects must evaluate whether notice will be required under the federal Worker Adjustment and Retraining Notification Act (WARN).13

Briefly, the WARN Act requires a covered employer (100 or more employees) to give 60 days’ notice prior to a plant closing or mass layoff.14  When required, WARN notice must be provided to affected nonunion employees, the representatives of affected unionized employees, the state’s dislocated worker unit, and the local government where the closing or layoff is to occur.15

While WARN provides some leeway in the case of a natural catastrophe, the exception is quite limited. Employers may give shortened (or retroactive) notice if the disaster was a direct cause of the job losses, and may be able to rely on the “unforeseeable business circumstances” exception if the disaster was an indirect cause. Nonetheless, employers are not relieved completely of their WARN notice obligations. They must give “as much notice as is practicable” (even if notice is retroactive), and they must state why they were unable to give notice earlier.16

9.  State Plant Closure or Mass Layoff Notifications

Some states have enacted mini-WARN laws or otherwise require notice to a state agency in the event of a mass layoff. None of the states expected to be directly affected by Tropical Storm Barry, however, have such a state statute. In this situation, employers can follow relevant requirements under the federal WARN laws to satisfy their obligations.

10.  Qualified Disaster Payments to Employees

Internal Revenue Code section 139 provides that an employer may make a payment to an employee that constitutes “a qualified disaster relief payment,” without any income or payroll tax consequences. “A qualified disaster relief payment” means any amount paid to or for the benefit of an individual to reimburse or pay reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a “qualified disaster,” or to reimburse or pay reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence or repair or replacement of its contents to the extent that the need for such repair, rehabilitation, or replacement is attributable to a qualified disaster. A “qualified disaster” is generally one that is declared by the President of the United States. In the past, hurricanes have been presidentially declared “qualified disasters” within certain affected areas.

In short, with such a designation, employers may make payments to their employees to help them with living or personal expenses or repairing their homes without having to withhold or pay income and payroll taxes.

As we watch Tropical Storm Barry, we hope that our clients and friends in the area stay safe.

 

Footnotes

1 Robinson v. Apria Healthcare, Inc., 874 So. 2d 418 (La. Ct. App. 2004) (employee's claim for unpaid wages for time spent on-call to be determined by terms and conditions of employer's policy).

2 29 C.F.R. § 541.602(a) (explaining that deductions may not be made when work is unavailable at the employer’s instruction); see U.S. Dep’t of Labor, Wage and Hour Div., Opinion Letter FLSA2005-46 (Oct. 28, 2005) (stating that exempt employees must be paid when “the employer closes operations due to a weather-related emergency or other disaster for less than a full workweek”); U.S. Dep’t of Labor, Wage and Hour Div., Opinion Letter FLSA2005-41 (Oct. 24, 2005).

3 Ark. Code § 11-4-401(a).

4 Ark. Code § 11-4-401(c).

5 La. Rev. Stat. § 23:633(A).

6 Miss. Code Ann. § 71-1-35.

7 For example, if the timely payment of wages to employees in California is compromised, an employer may be subject to monetary penalties under that state’s labor code.

8 La. Rev. Stat. § 23:1017.1 et seq.

9 The National Urban Search and Rescue Response System was established under the authority of the Federal Emergency Management Agency (FEMA) to organize federal, state and local emergency response teams into integrated federal disaster response task forces.

10 38 U.S.C. § 4303(13).

11 As of this publication, President Trump has not yet designated any such category of persons. Service in the National Guard for a unit activated by a state governor, rather than the president, and work for the FEMA generally would not be considered part of the uniformed services under USERRA. 

12 General information about relevant state unemployment benefits is available at the Arkansas Unemployment Guide, the Louisiana Workforce Commission, and the Mississippi Department of Employment Security.

13 See, e.g., Bruce Millman & Daniel Thieme, WARN Notice – One More Burden for Employers Recovering from Sandy?, Littler Insight (Nov. 27, 2012).

14 A plant closing occurs when a facility is permanently or temporarily closed and 50 or more full-time employees suffer a job loss. A mass layoff occurs when either of the following suffer a job loss: (a) 500 or more full-time employees at a facility; or (b) 50 or more full-time employees at a facility constituting at least 33% of the workforce. A job loss includes a layoff of six months or more. 29 U.S.C. § 2101(1)-(3).

15 20 C.F.R. §§ 639.4, 639.6.

16 See, e.g., 29 U.S.C. § 2102(b); 20 C.F.R. §§ 639.7, 639.9.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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