Snow Days and Emergencies: Should You Pay Employees?

During the winter, when people are repeatedly digging out of blizzards, employers find themselves monitoring the weather constantly wondering how to approach a myriad of operational headaches that come to the fore.

Should a worksite be closed, and for how long? Who should be paid, and for what period? Can my employees work from home?

While the kids may be looking forward to a snow day, employers are acutely aware that winter brings about several complications such as school closures, dangerous commutes to work, and various service delays and interruptions.

The same concerns apply during national tragedies like Hurricanes Sandy and Katrina, thunderstorms, dust storms, serious fires, mudslides, floods, hurricanes, earthquakes and other such emergencies that threaten to obliterate the homes and livelihoods of employees.

Even less severe situations such as foot or two of snow, power outage, or minor flooding can make it quite difficult or even impossible for employees to be physically present at the workplace, even for days.

They will also affect the ability of businesses to stay open and serve customers.

Numbers of employees who miss work due to inclement weather each month. Source: Bureau of Labor Statistics

Inclement weather and other business emergences do not just affect employees, but their family members as well.

For instance, their children cannot go to school or be left at the daycare, which might make it a greater challenge for the employee to make it to work, since they can’t live the child alone.

An employer must carefully consider several factors when determining if closing the business in the event of inclement weather is the correct course of action.

These include demand for products/services, potential reduction in revenue, the actual cost of continuing operations and most importantly, employee safety.

Disruptions stemming from snow days and other emergencies also bring about important payroll issues that employers should be prepared to resolve beforehand.

When a snow day or another emergency determines whether your workforce can perform their tasks or not, you will need a knowledge of the legal aspects that come into play.

You might also want to consider how your employees will view you decision to pay or not pay them, over and beyond the legal requirements.

If you decide you are not paying them, how will that affect their morale? Would they describe you as an employer of choice?

There are several factors that are used to determine whether an employee will receive pay for inclement weather days and during other emergencies.

Companies are essentially guided by the federal Fair Labor Standards Act (FLSA). The United States Department of Labor’s Wage and Hour Division is responsible for all legal issues at the federal level.

There is also a raft of other state laws that outline specific remuneration guidelines employers must comply with as well as the company policy.

Additional factors include issues like if the worksite is closed, or whether it hasn’t closed but an employee(s) is unable to make it to work.

Under the FLSA, employees are classified into two: exempt and non-exempt employees.

The most significant difference between the two is pay for overtime work.

The word ‘exempt’ is in reference to overtime pay.

During snow days, inclement weather and other work emergencies, the law specifies disparate payment regulations for employers regarding these two types of workers.

EXEMPT EMPLOYEES

For an exempt employee, the employer is not required under the law to pay them for overtime work. This is left to the employer’s discretion if he finds it necessary to compensate them for the extra hours worked.

Some employers blend this into the benefits packages in the form of extra perks.

The FLSA outlines three broad categories of employees considered as exempt from overtime pay – executive, professional and administrative.

Employees in executive, administrative and professional roles, salespersons, and those in STEM (Science, Technology, Engineering and Math) can be classified as exempt.

But they have to meet the following criteria.

• They must be paid a salary as opposed to hourly-basis remuneration.
• They must earn $455 or above per week.
• They are paid a salary for any week they work.

In addition, they must meet a certain set of tests regarding their responsibilities and duties on the job.

The Society for Human Resource Management (SHRM) gives these general conditions that must be met to classify a worker as exempt:

• Executive exemption: the employee must have as a primary duty, the management of an enterprise, subdivision or department. They have to regularly directly manage at least two employees, with the ability to hire and fire. In the least, their recommendations must have important weight during the hiring process.
• Administrative exemption: Their primary duty must be performing office/non-manual work directly associable with the management and general business operations of the organisations. Their everyday work must include the authority to make independent judgement and discretion in significant issues.
• Professional exemption: Their primary duties must be in the performance of work requiring expertise in an advanced field. This could either be in science or a highly specialised field including data analytics and engineering.

There also exists additional state and federal laws that relate to the classification of other types of workers including interns, contractors, temps, volunteers, foreigners, volunteers and those in training. Researchers and other workers operating under governmental or educational grant are also classified differently.

For example, in California, instead of the $455 a week salary threshold, large employers must pay an employee $960 and $880 to qualify as exempt with everyone else eligible for overtime pay in spite of their job responsibilities.

NON-EXEMPT EMPLOYEES

These are employees who, due to the kind of duties they are assigned, decision-making level, and compensation method, are subject to all the FLSA provisions, and most importantly, eligibility for overtime pay.

They normally need to account for every hour or fraction of an hour worked typically using a timecard or some other automated time-tracking system.

Non-exempt employees must be compensated for all hours they have worked overtime at a premium rate of 1.5 times the normal pay.

This is applicable in all states in the U.S, with some states extending their overtime pay guidelines.

Overtime pay is any time worked above forty hours in a given workweek.

Note: a workweek is not necessarily Monday to Friday but rather a period of seven consecutive days or of 168 (24 x 7) consecutive hours. Some states however calculate overtime as any extra time worked beyond eight hours in a day.

So, how does an employee’s status as exempt or non-exempt affect whether you pay them or not during snow days and other emergencies?

PAYING NON-EXEMPT EMPLOYEES DURING SNOW DAYS AND EMERGENCIES

Federal laws do not require an employer to pay a non-exempt employee when they do not show up to work as a result of a snowstorm or any other emergency.

This is true whether the worksite is open or closed or even when the company has instructed the employees not to come.

If the company decides to close for a certain part of the day due to the bad weather, the employer is only required to pay the non-exempt employee for only the actual hours they worked that day when the company was open.

In some states, there’s a law requiring compensation for what is called ‘reporting time pay.’

This is a provision that gives an employee the right to receive some payment for showing up to work as was previously scheduled, even if work was not possible on that day.

The law requires a minimum number of hours to be paid to the employee for that day.

In California, for example, employers are needed to give half a day’s reporting time pay to all employees who report as planned.

If a non-exempt employee stayed at home during bad weather but he spent time working remotely by for example replying to emails or making business calls, whether authorized or not, they must be paid for the actual time spent working.

In such a scenario where an employee is unable to report to the worksite, or the worksite is closed and they are willing and actually do work, an employer may have to rely on the employee’s self-reported hours worked if they do not have a software implementation to this effect.

One exception exists for non-exempt employees who have a contact that stipulates a fixed salary for variable workweeks.

They have agreed to work for an unspecified hours every week for a negotiate salary.

If work is interrupted on a snow day or other emergencies, the employer is bound to pay them a full weekly salary nevertheless.

The calculation of overtime for salaried non-exempt employees may need to change to reflect ‘actual time’ worked.

For example if your company closed from Monday through Wednesday and an employee worked three extra hours on Thursday, this may not be considered overtime – especially if it is based on the 40-hour work week as opposed to the 8-hour workday.

PAYING EXEMPT EMPLOYEES DURING SNOW DAYS AND OTHER EMERGENCIES

The Wage and Hour Division regularly updates it’s guidance to employers regarding payment decisions for exempt employees during bad weather days and other emergencies.

From the guidelines, the payment for exempt employees varies depending on the employer’s leave management plan, including whether the employee has accrued leave days or Paid Time Off (PTO).

It also depends on whether the company chooses to close due to bad weather or remains open but the worker decides to stay at home for whatever reason.

If the Company is Forced to Close

You must pay exempt employees their full weekly salary of you are forced to close during periods of bad weather.

This remains true whether the employee was at home for the entire workweek or not.

It is possible, though, for an employer to ask the employee to instead utilize their accrued leave days during the closure period.

The accrued leave could be in terms of PTO and vacation time.

Even so, the employer is obligated to give full remuneration to the exempt employee despite them having accrued leave days from the previous year.

When the employee does not have any leave balance at the time, the employer may need to advance leave time to them.

If the employee is yet to qualify for advance leave time, the employer has no choice but to pay the worker his full workweek’s pay.

If The Worksite Remains Open During Inclement Weather

Companies that choose to continue with operations in spite of the bad weather must bear in mind the eventualities associated with this decision.

This includes the inevitability of some employees being unable to come to work and the possibility of closing partway through the day or week.

Employers must pay exempt employees for any part of a day or full day the worker reports to work in the inclement weather period.

Additionally even when the worksite is closed for a part of the day due to the weather worsening, the exempt worker must receive their full salary.

If the exempt employee opts to stay at home due to the weather, the employer has the option of deducing accrued leave from the worker’s leave balance.

Now, if the said exempt employee has exhausted his accrued leave or has no yet qualified to have accrued leave, the employer can choose to deduct the pay from the full day(s) spent at home pro-rata.

This is allowed for under the FLSA’s permitted deductions since it constitutes absence from work for personal reasons other than disability or sickness.

The Department of Labor considers absence from work associated with transport problems in inclement weather when the employer is open as absence for personal reasons.

Salary deductions in the event of a partial day’s absence are not allowed, although an employer is free to deduct the time from the worker’s leave bank.

Caution is advised against docking exempt employees’ salaries. Some employers give their workers the option of ‘making up’ for lost time by working longer hours when they come back.

Note: this is not permissible for non-exempt employees – they must be paid for any overtime work.

To reiterate, when the company decides to close during the workweek, the exempt employee must be paid his full pay regardless weather the closure was partial or full day.

Working From Home

During snow days, bad weather and emergencies, some employers do provide for their workers to work remotely.

In such a scenario, the exempt employee will be entitled to receive their full salary and cannot be required to utilize their accrued leave days.

As a general rule for exempt employees, the Department of Labor guidelines state that ‘if the employee is ready, willing and able to work, deductions may not be made for time when work is not available’.

As such, if an employee was able and willing to work after a storm or any other emergency, they must be paid in full even if they did not do any work even for a portion of the week.

If they are unable to arrive on time on a snow day or need to leave earlier than usual because of floods when the office is still open, no portion of their pay should be deductible because of a partial day worked.

ADDITIONAL FLSA EMPLOYEE REMUNERATION ISSUES

• On-call time: Sometimes an employers may require a worker to stay on call at the worksite or stay close by. This is considered working ‘on call’ and the company will be required to compensate the worker for all this time. An example would be a maintenance worker instructed to remain on site to work on emergency repairs during a storm. They must be compensated whether or not any work was done since they were not free to leave and utilise this time for their own benefit.
• Waiting time: If you require an employee to wait at the worksite during inclement weather, they will need to be compensated. One example of this scenario is asking workers to remain on site and wait for power to be reconnected after a storm.
• Volunteer time: Workers in NGOs cannot be considered volunteers if they are performing the same tasks that their employer hired them to handle. They deserve compensation even when they assist their employer during an emergency. Companies are cautioned against classifying this as volunteering during an emergency when the services they offer benefit the organisation and it is what they would be regularly doing.

Additional Exceptions

• Generally, employers are at liberty to require both exempt and non-exempt workers to utilise paid time off (PTO) during periods of inclement weather and natural disasters. Some states and even some local jurisdictions however prohibit this. If the state mandates paid sick leave, it can only be used for very specific circumstances.
• According to the FLSA, there is an exception when businesses close for an extended period. For example when a company has had to close for an extended period due to an extended power outage employees will not work at all that week. In such situations, an exempt employee need not be paid for that payroll week. This applies even if the choice not to work is the employer’s, according to the SHRM.

DEVELOPING A POLICY FOR SNOW DAYS, RAINY DAYS AND EMERGENCIES

It is absolutely necessary that employers are not caught flat footed during inclement weather periods and other natural emergencies.

Employers must be able to anticipate possible emergency events and determine how much effect they could have on their ability to continue doing business.

This should be handled by drawing up an inclement weather policy that outlines what an employee can expect during such periods that Mother Nature makes its extremely hard or even dangerous to get to work.

It is definitely much better to prepare beforehand than have to come up with a policy on the fly in the middle of an emergency.

Bear in mind that employers do have enforceable legal obligations to their workers in addition to moral and ethical obligations that define their relationship.

Employees have this expectation that during emergencies their employers will foot all related expenses. This is really not always possible.

Of specific importance when drafting your inclement weather policy is to outline the handling of work hours and payments in the event of snow days, blizzards, rainy days and other emergencies.

The policy should cover the following:

• A clear definition of what would constitute an inclement weather day
• How payments will be handled during this period
• How work deliverables will be achieved over the period
• The procedure for contacting employees.
• Elaborate guidelines on what a worker should or can do when they cannot make it to the worksite.
• Company closure details
• The specifics of part-day closure
• Guidelines to employees on what’s applicable when they need time to repair resultant damages or problems stemming from the weather/emergency.

The inclement weather policy, while informing employees about what to expect from the company in such situations, also guides employers on how to determine closure and forewarning clients when it is dangerous to visit the worksite.

It is during this process that the employer has the opportunity to answer the question that we started with on the impact of choosing to pay or not to pay your workers.

While the employer has no choice when it comes to the FLSA requirements, the company has a chance to impact employee loyalty and confidence in their tenures by drawing a favorable compensation plan under the inclement weather policy.

Below are a few suggestions we highly recommend.

• During worksite closure duration, exempt employees should be paid in full for up to one week.
• Non-exempt employees and interns will receive their normal hourly pay for normal hours they were scheduled to work for up to one week during closure.
• In return for the first closure week’s pay, all employees should be required to work from home whenever practical – facilitation will be provided.
• No overtime pay will be given to any employee during the entire closure period.
• If an emergency extends for more than one week, beginning the second week all employees should be required to utilise their PTO or accrued leave days to cover the additional time the company is closed if they are to continue to get paid.
• Workers who had had taken the day/week in question off prior to the emergency will have the day(s) deducted from their PTOs as usual.
• The company should continue to provide all coverage (health, benefits, disability etc.) for up to 30 days from closure date. Note: Insurance, federal and state laws may change the number of days.

WRAPPING UP

So, should you pay your employees on a snow day, rainy day or during emergencies?

You are first of all bound by federal and state laws that explicitly direct you on how to proceed with exempt and non-exempt employees.

These laws also tell you what to do when the company closure exceeds a certain threshold where you can no longer afford to pay exempt employees.

Beyond these laws, you want to have a favorable company policy that gives employees the confidence and morale you need them to have to continue working for you.

The recommendations provided above should act as a starting point for you to think on how you can serve your employees during these stressful periods.

NOTE: Be advised that the information provided above while deeply researched and authoritative is not a substitute for legal advice. You must be conversant with the specific federal, state (country) and county-level legislations that relate to your company and where you are operating. This is meant as a guidance and starting point for you.