Regardless of what the groundhog sees on February 2nd, the impacts of winter on employers across the Northeast will be felt well into the spring. And to the surprise of some lawyers, the biggest legal questions regarding winter weather have more to do with how winter storms affect wage and hour issues than property damage or other issues related to snow and ice.
Here are a few points that may impact how employment issues should be handled during inclement weather.
Payment Only for Hours Worked
Non-exempt employees need to be paid for hours worked. If a storm or flood closes your plant or job site and your employees cannot work, then no pay is due for the days they did not work. However, if an employee works—even when disobeying an employer’s order not to work—they must be paid for any work completed. Disciplining the employee is a separate issue from paying them for work done.
On-Call and Fluctuating Workweek Employees
There are a few exceptions to the rule that you must pay non-exempt employees for hours worked.
Where employees are on-call, either waiting at home to be called in or waiting at the job site to wait out the storm – employees might need to be paid for certain time spent on-call. An employee who is required to remain on-call on the employer’s premises or so close thereto that he cannot use the time effectively for his own purposes is working while on-call and should be compensated. If an employee who is on call can use his or her time freely and is not performing a specific assigned task, he does not need to be compensated.
Another exception applies to employees who work on a fluctuating workweek basis. These are employees who receive a set weekly salary no matter how many hours they work, plus additional overtime pay if they work more than 40 hours in one week. These employees must be paid during any workweek in which they perform any work. Even if your widget factory is closed on Monday and Tuesday due to a snowstorm, if your employee works on Wednesday, they would need to be paid their full fluctuating workweek pay.
Use of Paid Time Off During a Storm
Employers should know that the Fair Labor Standards Act does not require employers to provide paid time off (PTO) to their employees. However, employers are permitted under federal law to require employees to use available vacation time or PTO during an employer closure due to inclement weather.
While this might sound like a good deal to an employer to help cover costs during a business closure, consider the impact on employee morale and retention before applying PTO to days when your business cannot operate.
Risk of Reclassification
Most employees who are exempt from federal overtime requirements and paid on a salary basis are not subject to salary reductions because of a business closure. In fact, if an employer improperly reduces an employee’s salary, they may risk having the employee reclassified as a non-exempt worker, which could be a costly mistake.
Use of Downtime
In the event of a business closure, to avoid productivity losses from employees whose exempt roles are not suited to work from home, employers can find creative ways to use the time. On days when inclement weather closes an office, an employer can require exempt employees to complete any required online training or attend online meetings. Since workers must be paid anyway, the employer can require them to use their time to work, even if their job does not necessarily lend itself to working remotely.
Use of PTO
While employers will likely have to pay exempt employees their full salaries during storm-related business closures, employers do have the right to charge exempt employees for PTO for any work that they miss. However, if an employee does not have enough accrued vacation or PTO to cover the closure, they must still be paid their full weekly salary.
This inequitable use of PTO can be a source of cost-savings for your business, but can have major impacts for employee morale, especially during long, gray Northeastern winters. An employee may become disgruntled when they learn they were required to use their vacation day to be paid for a snow day, while a colleague who used all their vacation time was still paid for the business closure.
If you have concerns about employee morale and retention, think carefully about how you apply your PTO policies in covering inclement weather closures. Employees have a right to discuss their compensation, so be certain the risk of applying a PTO policy differently among employees is worth the possible reward.
Telecommuting and Reporting Pay
Whether work is done on-site or remotely, employees generally must be paid the same for the work performed—even if the employer did not request that the work be performed. Non-exempt employees working remotely must generally be paid at their usual hourly rate, subject to any overtime requirements. Be sure to set clear expectations about what work needs to be done and how long employees are authorized to work if non-exempt employees are telecommuting since unauthorized overtime can be expensive.
Finally, many states across the Northeast have additional requirements for hourly employees who report to work when the employer’s site is closed or not operating at full capacity. Reporting pay typically means that certain employees are guaranteed to be paid a minimum number of hours just for “reporting” to work. This can range from one to four hours of guaranteed pay. States that have reporting pay requirements include:
- New Hampshire,
- New Jersey,
- New York,
- Rhode Island, and
- Washington, D.C.
Some states allow reporting pay requirements to be waived if the employer makes a good-faith effort to provide employees with reasonable advance notice of a facility closure or that the employee should not report to work. Communication is key to saving both time and money.
Assessing the Impact
Understanding applicable wage and hour laws, setting clear expectations with employees, and communicating your business needs in advance of inclement weather can help employers and employees save money and stay safe through the winter and beyond.