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In any season, severe weather can unexpectedly disrupt your business. But the possibility is especially high in winter months.
With winter weather fast approaching, it’s time to revisit your business' inclement weather policy (or create one if you don’t have one already). You'll also want to brush up on your wage and hour knowledge so you’re prepared to compensate employees correctly if a weather event shuts down your business or reduces the hours employees can work. Here’s what you need to know.
1. Closed Due to Weather: Paying Your Employees
From a culture and morale standpoint, compensating employees when inclement weather keeps them from getting to work or forces the business to close can be a great idea. But are you legally required to pay people in those situations? The answer depends on how your workers are classified under the Fair Labor Standards Act (FLSA).
RELATED: Exempt vs. Nonexempt - What's the Difference? >>
“Nonexempt” is a specific federal designation that refers, in part, to employees who earn less than $684 per week and are eligible for overtime. They are usually, but not always, hourly employees. Generally, your company has no obligation under the FLSA to pay non-exempt workers for hours they’re not working.
Therefore, if your business closes because of bad weather and non-exempt employees don't work during the closure, your company is not legally obligated to compensate them for that time. Nonexempt workers who perform work from home while the business is closed, however, must be paid for those hours.
A nonexempt worker who comes in late because of bad weather or leaves because you have chosen to close early to allow employees to get home before a snowstorm arrives is not entitled to receive compensation for the hours not worked. However, particularly in the latter situation, it would be beneficial for company morale if you pay the employee for the time he or she normally would have worked.
“Exempt employees” are paid by salary and do not qualify for overtime. Under the FLSA, you must pay exempt employees their full salaries if, during any week, they perform some work. In other words, if the exempt employee works on Monday, and an ice storm on Tuesday causes your business to close for the rest of the week, the employee must be paid the same salary he or she would normally have received for the full week’s work.
If, however, your workplace is closed for the entire week and the exempt employee performs no work that week, you are not obligated to pay the worker’s regular salary for that week.
In another possible scenario, if your business remains open but a salaried, exempt employee can’t get to work because of hazardous roads or other weather-related conditions, the Department of Labor allows you to deduct from the employee’s pay for any full-day absences if the employee performs no work at all during the work week.
An inability to come to work because of severe-weather conditions is considered a “personal reason,” under which a deduction is permissible. You may not reduce the exempt employee’s pay if the absence is due to sickness or disability.
If your workplace is open for business and weather prevents the exempt employee from coming in, but he or she performs even an hour of work from home during the work week, the full week’s salary amount is due.
The FLSA governs employee pay during foul-weather business closures in most states, but a few states have pay requirements that differ from the federal guidelines. For example, some states have minimum pay requirements when an employee comes to work but then has to return home upon an office closure. It, therefore, is important to learn whether your state has mandates different from the FLSA’s that would change how you compensate employees if harsh weather forces your workplace to close.
Employees may appreciate the option of choosing to use vacation time or paid time off if the weather unexpectedly closes your office and they can’t work. Your company also may require that unworked hours be deducted from workers’ accrued PTO accounts.
While this is legal, if your office has closed for weather in the past and you have not required employees to use paid time off during the closure, it would be best not to implement that practice without advising your employees first. Your policy for either allowing or requiring employees to use PTO or vacation time in order to be paid for unworked hours during a closure should be clearly stated so employees know what to expect.
In fact, it’s critical that your company includes an inclement-weather policy in your employee handbook. The policy should explain:
RELATED: Tornado Warnings - Can You Make Employees Stay at Work and Shelter? >>
Your inclement-weather policy won’t be able to cover every possible scenario that might arise, but you can focus on the kinds of weather events that are most likely to occur in your geographic region. If you are uncertain about what should be contained in the policy, Axcet HR Solutions can help you determine what regulations apply to your business and what details you should include.
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