The weather outside is terrible, and you want to close down your business for the duration. Can you cancel a work day or send your employees home early without pay for the duration of the closure? The answer is a bit complicated, and it depends on each employee’s classification as non-exempt or exempt where the overtime rules are concerned.

We’ll start with non-exempt (generally hourly) employees first, since they’re relatively easy. Employers are only required to pay non-exempt employees for hours spent doing actual work. If a non-exempt employee was scheduled to work, closure of the business will prevent that work, and thus the employee does not get paid. If the closure happens mid-day, the employee only gets paid for the hours worked before being sent home. Simple enough.

Exempt (generally salaried) employees – those who do not qualify for overtime pay – are a bit more difficult. The premise with exempt employees is that people working in these positions work longer hours and are compensated for them, so hours worked really doesn’t enter in the equation. The problem occurs when the business closes – exempt employees will generally still be paid for that time. Exempt employees must be paid for an entire week of work in any week in which they have worked at all, so bad weather closure days must be paid to them. The only time that exempt employees can go without pay when a business is closed is if the closure lasted the entire week. In that case, the exempt employee doesn’t have to be paid, as she or he didn’t work at all that week.

The good news for employers is that exempt employees can be made to use their paid time off to compensate for the bad weather closure. If this is an employment policy, however, it should be noted in the employee handbook to avoid surprises.