As the winter season starts, employers can expect disruption to the business following winter weather episodes. When the office close or employees cannot drive safely to work, the question of pay arises. Should employees be paid when they can’t go to work because of the weather?
Compensation decisions have to comply with the Fair Labor Standards Act (FLSA) which establishes two categories of employees: exempt and non-exempt.
Non-exempt employees are often referred to as “hourly workers” but the correct designation is non-exempt (because they are non-exempt from overtime pay). For this category of employees, they only get paid for time worked and they receive overtime when they work over 40 hours a week.
Speaking of overtime, the pay threshold for exemption will soon rise to is $684 per week (equivalent to $35,568 per year). This represents a 51% increase from the current threshold and will be effective on January 1, 2020. This is only a couple of weeks away!
If workers are reclassified as non-exempt as a result of the increase in pay threshold, they need to understand how business closure will impact their income. However, employers can allow non-exempt employees to use paid leave instead of losing pay.
When it comes to pay and work hours, exempt employees require a more in-depth analysis. They are often referred to as “salaried employees” or “white-collar professionals.” Typically, managers, supervisors, and professionals are classified as exempt.
When a business closes because of weather or power outage, exempt employees must be paid if the closure lasts for less than a full workweek. Exempt employees are required to receive a full salary for any week in which partial work is done, regardless of the hours worked. When no work is performed for an entire workweek, then an employer may choose not to pay their exempt employees.
An employer can require exempt employees to use accrued leave during a closure but the employer continues to be obligated to pay the full salary. The employer might consider advancing leave if the employee doesn’t have enough accrued time off.
When exempt employees do not report to work because of weather and doesn’t do any work from home, the employer can deduct pay in for each full-day of absence. Of course, using paid leave is also an option to maintain pay.
Whatever you decide, check your past practices. Be consistent from one weather event to another!
Finally, in this area of telework and remote access, closing the office does not have to shut down productivity completely. Many employees can work from home. In this case, compensation is due based on FLSA classification:
- Exempt working a few hours from home will be due their full day pay,
- Non-exempt working from home will be paid based on hours worked.
One last word of wisdom, as remote work comes more commonplace (and expected from employees!), it might be time to establish telework policies. Besides, accommodating the business in times of business disruption, remote work can offer accommodation for employees who need more flexibility to balance work and life.
If you need help with remote work policies and FLSA regulations, contact me. I help employers like you get their HR right.