Hurricane Florence Approaches – What Can Employers Anticipate?

by Littler
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Hurricane Florence shows no sign of relenting as it barrels toward Virginia and the Carolinas. Forecasters are currently considering Florence a category 4 storm, which could strengthen by the time it makes landfall later this week. Safety and security should be paramount as residents brace for the expected damage. The Federal Emergency Management Agency (FEMA) has published safety guidelines in relation to hurricanes, and we encourage all readers to take note of FEMA’s recommendations. When the storm passes, however, employers may face a myriad of employment law issues. Below are ten issues employers might need to consider once the storm passes.

1.       Payment of the Wages of Non-Exempt Employees

Under the federal Fair Labor Standards Act (FLSA), 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. 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, as well as North Carolina law, 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.1

2.       Payment of 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.

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.       Utilizing Remote Work

Employers trying to get up to speed after Florence 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 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.       Delays in Wage Payments

One possible consequence of a natural disaster such as Florence is the delayed processing of employees’ wage payments. This situation can cause employers to unintentionally run afoul of state law. Virginia, for example, requires employers to establish pay periods divided into at least two equal periods within the month for hourly employees.3 North Carolina, on the other hand, only requires employers to pay wages at regular intervals but has no requirement to notify employees if there is a change in pay schedule.4 In South Carolina, moreover, an employer must provide 7 calendar days’ advance notice to employees if there is a change to the designated payday or a decrease in the employee wage rate.5 Yet, 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, the states currently in Florence’s path (Virginia, North Carolina, and South Carolina) have not yet indicated if there may be any relief from or waiver of the normal wage payment laws. 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.6

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 Hurricane Florence.

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). Even if not covered by the FMLA’s provisions providing for time off for illness or injury, an employee may qualify for sick or other leave under a company policy or collective bargaining agreement. 

Certain employees may be eligible for leave as volunteer emergency responders. In South Carolina, an employer may not terminate an employee who serves as a volunteer firefighter or EMT and who responds to a declared state of emergency in lieu of coming to work.7 North Carolina has a similar law providing for such unpaid leave.8

Employees absent from work to assist with relief efforts may separately qualify for protected time off. 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 System into federal service,9 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.

Relatedly, to the extent that employers relax enforcement of their leave policies in light of Hurricane Florence, 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.       Providing 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 15+ employees) and related state antidiscrimination laws, such as North Carolina’s Persons with Disabilities Protection Act,10 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 Hurricane Florence’s impact may be entitled to reasonable accommodation, employers should take all such inquiries seriously.

7.       Eligibility for Unemployment Benefits

Employees who are displaced from their positions due to Hurricane Florence may be eligible for unemployment compensation from the applicable state workforce commission.11 State unemployment benefits typically run for 26 weeks, though some states, such as Virginia, may alter or extend those weeks of coverage.

8.       Federal WARN Notifications

We certainly hope that no employer faces shutdown because of the storm. Nonetheless, employers that ultimately decide to close a facility, or implement a mass layoff, due to Florence’s effects must evaluate whether notice will be required under the federal Worker Adjustment and Retraining Notification Act (WARN).12

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.13 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.14

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,” and they must state why they were unable to give notice earlier.15

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 three states currently in Florence’s path have their own mini-WARN law.

Both Virginia and South Carolina, however, require employers to notify the state unemployment agency of a mass separation. In South Carolina, for example, notice of a mass layoff involving 10 or more workers must be filed with the pertinent office no later than 10 calendar days (exclusive of Sundays and holidays) after the separation.16 Employers are instructed to use a designated form for notice. South Carolina employers also should inform all affected employees that notice has been submitted and a claim initiated, so as to avoid duplication of efforts and redundant filings.17

In Virginia, meanwhile, notice is required if a separation (that is permanent, lasting at least seven days, or indefinite) affects: (1) at least 20% of the total number of workers in an establishment; (2) at least 50% of the total number of workers employed in any division or department; or (3) 25 or more workers employed in a single establishment, where their separation occurs about the same time and for the same reason.18 If an employer submits a list of affected workers to the Virginia Employment Commission, it need not report each worker individually. Employers must notify the commission “as soon as possible, but in no case later than 24 hours after the date of separation.”19

10.      Making 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 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.

For now, we hope our clients and friends stay safe during the storm, and we are prepared to help as best we can throughout the recovery from Hurricane Florence.  

 

Footnotes

1 See Spencer v. Hyde Cty., 959 F. Supp. 721 (E.D.N.C. 1997); see also Whitehead v. Sparrow Enter., Inc., 605 S.E.2d 234, 237 (N.C. Ct. App. 2004), review denied, 618 S.E.2d 240 (N.C. 2005) (standing for the principle that the North Carolina Wage and Hour Act can be interpreted via FLSA interpretations).

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 VA. Code Ann. § 40.1-29.

4 N.C. Gen. Stat. § 95-25.6

5 S.C. Code Ann. § 41-10-30(A).

6 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.

7 S.C. Code Ann. § 6-11-1460.

8 N.C. Gen. Stat. § 166a-19.76.

9 38 U.S.C. § 4303(13).

10 N.C. Gen. Stat. § 168A.

11 General information about unemployment benefits is available from the North Carolina Division of Employment Security, the South Carolina Department of Employment and Workforce, and the Virginia Employment Commission.

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

13 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).

14 20 C.F.R. §§ 639.4, 639.6.

15 29 U.S.C. § 2102(b); 20 C.F.R. §§ 639.7, 639.9.

16 S.C. Code Ann. Regs. 47-19.

17 South Carolina Dep’t of Emp’t and Workforce, Employer Handbook on the South Carolina Code, at 50 (July 2011), available at https://dew.sc.gov/docs/default-source/employers/employerhandbook.pdf

18 16 Va. Admin. Code § 5-10-10.

19 16 Va. Admin. Code § 5-60-10(C).

 

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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