Snow days, hurricanes, power outages, floods - when weather of biblical proportions forces you to close or prevents your employees from getting to work, what do you do?
The answer depends on whether the employee is paid a salary or paid hourly (or more technically, whether they are exempt or non-exempt under the federal Fair Labor Standards Act (“FLSA”)). Under the FLSA, non-exempt employees are paid for hours worked, so if the office is closed for a snow day or a non-exempt employee cannot make it to the office because of the weather, that employee does not have to be paid for their time off. Note however, that some states require that an employer pay a minimum amount of time to an employee who reports to work and is available to work. In the case of an early closure or delayed opening, an hourly employee may be entitled to pay for a minimum number of hours. Collective bargaining agreements may also alter the federal rule for hourly workers.
On the other hand, employers must pay exempt employees a regular salary for every week in which they perform any work without any alteration based on quality or quantity of work. What this means in reality is that employers cannot easily make deductions from exempt employees’ salaries for time off, like a doctor’s visit or personal time, without jeopardizing the exempt status. The law recognizes two limited exceptions to this “no deduction” rule for full day absences only:
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Employers may deduct for absences of one or more full days because of sickness or disability if the employer has a paid sick leave plan in place (or PTO plan) that compensates the employee for such absences, but the employee either has not yet qualified under the plan or has exhausted all available leave under the plan. -
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Employer may deduct for absences of one or more full days for personal reasons not due to sickness or accident.
So what does an employer do when there is a snow day? Can an employer force its exempt employees to use a vacation day, personal day or other PTO day?
Under federal regulations, when an exempt employee is “ready, willing and able to work, deductions may not be made for time when work is not available.” 29 C.F.R. § 541.602. Employees will not be considered to be paid “on a salary basis” if deductions from salary are made for absences prompted by the employer or based on the operating requirements of the business. See 29 C.F.R. §541.602(a). Thus, if the employer chooses to close the office, the employer must pay the exempt employee his entire salary for any week in which he performs any work; meaning, he must be paid for the snow day. But, because the FLSA does not require an employer to provide vacation or PTO, an employer is free to direct staff to take vacation or PTO on specific days in full or partial day increments for such absences, so long as the employee receives his full salary. However, if the employer does not offer a vacation or PTO plan or the exempt employee has no available vacation or PTO, the employer must pay the exempt employee his full salary for any week in which he performs any work, even if one of those days is a snow day occasioned by the employer closing the office.
What if the office is open but the employee cannot make it in?
If the office is open and the exempt employee chooses not to come to work, then an employer may deduct a full day’s pay from his salary because this absence is a full day absence for “personal” reasons. But, if the employee only takes a partial day, then an employer cannot deduct for less than a full day’s absence because employers can only deduct for full day absences for “personal” reasons. Therefore, the employer must pay the employee his full salary, partial day absence included. If the exempt employee has PTO available, an employer can force the employee to use a full or partial PTO day for this absence, so long as the employer pays the employee his full salary for the week. If the employee has exhausted his PTO and the office is open, but he can’t make it in, the employer may deduct a full day’s salary without losing the exemption.
Working remotely
Keep in mind that many employees, exempt and non-exempt, can work remotely. Employers must pay non-exempt employees for every hour that they work, remote work included, even if the office is technically closed. What about exempt employees? Does the ability to work remotely make them “available” for work even when the office is closed? Likely yes. If the employee can work remotely, then it seems this situation should be treated the same as when an exempt employee chooses not to come in to the office when it is open.
Did you get it wrong this winter?
Not to worry. Good faith, isolated, inadvertent mistakes do not necessarily equal loss of the exemption. Employers will lose the exemption if they have an actual practice of making deductions that demonstrate the employer did not intend to pay employees on a salary basis. If an employer has a clearly articulated policy or procedure in place for reporting complaints related to improper deductions, reimburses improper deductions and makes a good faith commitment to comply, the employer will not lose the exemption for a hiccup along the way.
