When I stepped outside on a recent morning the windchill was -20° and the roads were icy. The really bad news – it’s only the middle of December. Thus begins the time of year when it is no longer a given that employees will be able to make it to work or that work will even be open for business.
An important issue in such circumstances is whether employees are entitled to pay when a company closes for the day or the employee is unable to navigate the way to work. Generally, the answer is provided by the Fair Labor Standards Act (FLSA) and the accompanying Department of Labor regulations and likely depends on whether the employee is exempt or non-exempt under that law. Employees subject to a collective bargaining agreement may be subject to different rules.
Company Closures: Non-exempt employees are generally paid for time actually worked. Therefore, if the company closes its business for a full day because of bad weather, a non-exempt employee is not entitled to a wage payment for that day. Most likely, however, the non-exempt employee could use PTO for that absence. If a non-exempt employee reports for work but is then sent home, the FLSA only requires payment for hours actually worked. Please note that some states have reporting pay or show-up pay laws that may require a minimum wage payment in such circumstances.
Exempt employees must be paid for days that they are ready, willing and able to work. 29 C.F.R. § 541.602(a). Accordingly, an exempt employee is entitled to their salary for that day, whether any hours were worked or not. It is possible for the employer to make the exempt employee use PTO for that day, but if the employee is out of available PTO the employee must receive their regular salary for that absence.
Employee Absences: Even if the company is not closed, an employee may choose to remain home because of safety concerns, commuting issues, or perhaps to stay home with a child because of a school closure. In the case of a non-exempt employee, no wages are owed for such an absence. Again, a non-exempt employee will likely be able to use available PTO for that absence. An exempt employee who chooses to remain home for a full day, need not be paid for that day. 29 C.F.R. § 541.602(b)(1). To help determine whether such an absence is not required by the business, it may be helpful for the company to have in place an inclement weather policy. If the exempt employee is absent for less than a full day, they must be paid for the full day – whether as regular salary or as PTO time. Finally, remember that it is possible for certain employees to work from home on such days. If they do so to the employer’s knowledge, then they should be compensated accordingly.
Takeaway: In the event bad winter weather causes a business closing or an employee is not able to make it into work due to inclement weather, employers should be mindful of any FLSA or state law obligation to pay the employee for that absence and correspondingly manage available PTO time