As we head into the waning days of June, strong storms and persistent flooding have been all over the news lately. Near me, storms earlier this week demolished homes and businesses, dropped a communications tower on a fire department, knocked out power, and generally left businesses and homeowners unable to go about their normal work. In communicating with clients impacted by recent storms across Illinois and Indiana, a few related questions came up regularly: are there rules that we must follow if weather shuts us down or if employees want to help clean up and get us up and running again? Fortunately, the DOL offered some clear advice for employers in this or any other inclement weather situation in a 2005 Opinion Letter.
Let’s first look at the rules for non-exempt employees, because they are pretty straightforward. Employers are only required to pay non-exempt employees for the hours that they actually work. This is true whether your office is open and just inaccessible for some staff or if you close due to a natural disaster or inclement weather.
For clients with employees in the field, keep in mind that merely closing your office might not relieve you of your duty to pay those staff. An employee delayed in the field while on duty due to a severe storm but cannot perform actual work for several hours is likely still considered to be on the clock. Only if the employee is relieved of duties completely would that compensable time end (but beware of travel time issues, of course). Practically, when the issue is limited to only a few hours of time, you’re better off paying the employee than creating a dispute that will undoubtedly cost you more than whatever extra wages you would pay out.
Section 541.602(b) of the current FLSA regulations provides a few limited exceptions to the general rule that an exempt employee must be paid on a salary basis without deductions from pay. The regulations allow deductions when an exempt employee is absent from work for one or more full days for personal reasons, other than sickness or accident. Thus, if an employee is absent for one or more full days to handle personal affairs, if you make a corresponding deduction from the employee’s salary, it will not affect his or her exempt status. However, another part of the same regulation explains that aside from this situation, if an employee is “ready, willing and able to work, deductions may not be made for time when work is not available.” 29 C.F.R. §541.602(a)
If your office is closed due to inclement weather (or, really, for any other reason), you cannot make deductions from the salaries of your exempt employees. Doing so would affect the employee’s exempt status, since the deduction would not be for personal affairs, sickness, or accident. 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)
However, this does not mean that you cannot require exempt employees to take vacation or other paid time off during closures or times when employees simply cannot (or choose not) to make it to your office when it is open due to inclement weather. Since employers are not required under the FLSA to provide any vacation time to employees, an employer that does provide vacation or PTO time may require that employees use it on specific days or in specific situations, like inclement weather situations that either close your office or prevent the employee from reaching your otherwise open office. Requiring employees to use leave in these situations does not affect the salary basis as long as the employee still receives the same salary at the end of the pay period.
If your office is open and an employee cannot (or chooses not) to brave the trip to the office due to inclement weather, such as transportation difficulties, road closures, or states of emergency/travel bans, this is considered absent for personal reasons. In that situation, you may deduct from the employee’s salary for any full days during which he or she performs no work for this reason (unless vacation or PTO is used).
Beware, though. Deductions from salary for less than a full day’s absence are not permitted under the regulations. An exempt employee who works from home for even part of the day, or who only is late/leaves early due to inclement weather must receive his or her full, guaranteed salary even if the employee has no accrued vacation or other leave benefits.
Similarly, if your office is closed, the DOL considers your exempt employees’ absences as being occasioned by the closure or your business operation requirements. Therefore, while you can require employees to use accrued leave under your policy, you must pay exempt employees their full, guaranteed salary for any absence(s) occasioned by the closure. When in doubt, pay the full salary.
Volunteer Clean-Up/Recovery Work
Sometimes, storms cause damage to equipment and facilities. Remember that your employees cannot “volunteer” to help you rebuild and repair. Non-exempt employees must be paid for that working time, even if they want to donate that time. Exempt employees must be paid, too, for the same reasons above. You can, but are not required to provide additional compensation if they do.