Inclement Weather: ‘Do I Have to Pay Employees if We Close?’

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As Tropical Storm Cindy churns in the Gulf of Mexico, many of us are wondering how do we compensate our employees during this crisis. To help you understand the rules governing pay during weather-related emergencies, we compiled responses to frequently asked questions:

Please understand that our services provide general HR guidance and should not be interpreted as legal advice. For legal advice on this matter, please consult with legal counsel who specializes in employment law.

Non-Exempt Employees:

Louisiana law does not require employers to pay employees for reporting or showing up to work if no work is performed. An employer is also not required to pay an employee a minimum number of hours if the employer dismisses the employee from work prior to completing their scheduled shift. Employers are only required to pay employees for hours actually worked.

Exempt Employees:

An employer can require employees to use PTO if sent early due to inclement weather, as long as the employee is guaranteed their salary per pay period. However, if the employee has no PTO available, the employer may not be able to reduce wages unless it is permissible by law.  See more information below.

The federal Department of Labor Wage and Hour Division (WHD) regulates an employer’s abilities to take deductions from an exempt employee’s salary. According to the WHD, there are limited situations in which an employer may deduct from an exempt employee’s salary.

The following deductions are permitted to be made from an exempt employee’s salary.

  • When an employee is absent from work for one or more full days for personal reasons other than sickness or disability;
  • For absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness;
  • To offset amounts employees receive as jury or witness fees, or for temporary military duty pay;
  • For penalties imposed in good faith for infractions of safety rules of major significance;
  • For unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions; An employer may impose in good faith an unpaid suspension for infractions of workplace conduct rules, such as rules prohibiting sexual harassment, workplace violence or drug or alcohol use or for violations of state or Federal laws. This provision refers to serious misconduct, not performance or attendance issues. The suspension must be imposed pursuant to a written policy applicable to all employees.
  • In the employee’s initial or terminal week of employment if the employee does not work the full week, or
  • For unpaid leave taken by the employee under the federal Family and Medical Leave Act.

During office closures due to inclement weather or other disasters, may a private employer direct exempt staff to take vacation (or leave bank deductions) or leave without pay without jeopardizing the employees’ exempt status?

The FLSA does not require employer-provided vacation time. Where an employer has proposed a bona fide benefits plan, it is permissible to substitute or reduce the accrued leave in the plan for the time an employee is absent from work, even if it is less than a full day, without affecting the salary basis of payment, if the employee still receives in payment an amount equal to the employee’s guaranteed salary. See Opinion Letters dated April 15, 1994; March 30, 1994; and April 14, 1992. However, an employee will not be considered to be paid “on a salary basis” if deductions from the predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business. See 29 C.F.R. §541.602(a). Thus, if the employer closes the office due to inclement weather or other disasters for less than a full workweek, the employer must pay the employee’s full salary even if:

  1. the employer does not have a bona fide benefits plan;
  2. the employee has no accrued benefits in the leave bank;
  3. the employee has limited accrued leave benefits and reducing that accrued leave will result in a negative balance; or
  4. the employee already has a negative balance in the accrued leave bank.

Since employers are not required under the FLSA to provide any vacation time to employees, there is no prohibition on an employer giving vacation time and later requiring that such vacation time be taken on a specific day(s). Therefore, a private employer may direct exempt staff to take vacation or debit their leave bank account in the situation presented above, whether for a full or partial day’s absence, provided the employees receive in payment an amount equal to their guaranteed salary. In the same scenario, an exempt employee who has no accrued benefits in the leave bank account or has a negative balance in the leave bank account still must receive the employee’s guaranteed salary for any absence(s) occasioned by the employer or the operating requirements of the business.

Source: https://www.dol.gov/whd/opinion/FLSA/2005/2005_10_24_41_FLSA.htm

Additional Resource:

http://cbspulse.com/2016/11/16/winter-extreme-weather-natural-disasters/

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