Throughout the 2018 hurricane season, we’ve seen storms and hurricanes wreak havoc across the nation, destroying many businesses while forcing others to temporarily close. In these turbulent times, business operations tend to cease. However, payroll obligations may still be present.
The bottom line is that employees must be paid on time for any work done during the pay period, even when a storm or hurricane hits. For this reason, employers should have an inclement weather policy. At a minimum, the policy should address payment for nonexempt and exempt employees, PTO use, and paycheck delivery method.
Payment for Nonexempt Employees
According to the Fair Labor Standards Act (FLSA), nonexempt employees must be paid for hours actually worked. If they don’t work because of a storm or hurricane, you don’t need to pay them for the time missed. To see how your business may be subject to the FLSA, click here.
Special situations to be aware of:
- An employment contract or collective bargaining agreement may require payment, even though the FLSA does not.
- Remote employees should be paid for time spent working during inclement weather. Make sure you have strong timekeeping protocols for employees working remotely because of severe weather but are unable to clock in and out. Also, let remote employees know exactly how much time they’re allowed to spend working during inclement weather.
- Some states have “reporting time pay” laws, which require that employers pay a minimum number of hours to nonexempt employees who arrive to work as scheduled but are sent home earlier than planned.
Payment for Exempt Employees
Per the FLSA, exempt employees must receive their full salary for any workweek in which they do any work. Though you can make permissible deductions from an exempt employee’s salary, you cannot deduct for business closures. Therefore, if your business closes for less than one week due to a storm or hurricane, exempt employees must get their full weekly salary if they did any work during that week.
If an exempt employee doesn’t work at all during a full-week business closure, you don’t have to pay him or her for that week.
You can typically require that nonexempt and exempt employees use their accrued PTO to cover absences caused by adverse weather. However, in some states, employers cannot require that employees use their available PTO for weather-related absences. For instance, if the state mandates paid sick leave, employees may be allowed to use their allotted sick time only for specific medical reasons.
Keep in mind that exempt employees must receive their full weekly salary if they did any work for the week—regardless of whether they have PTO available. But if your business closes for the full week and the employee performed no work during that week plus has exhausted his or her PTO, then you don’t have to pay him or her for that week.
Paycheck Delivery Method
As noted, employees must be paid by the established payday, even in the event of a storm or hurricane. Therefore, it’s imperative that you have a dependable payroll processing system in place. Also, encourage all of your employees to sign up for direct deposit (or pay cards, if applicable).
With direct deposit and pay cards, employees can access their wages on payday. Those who rely on live checks may not be able to pick up their paychecks until after the storm or hurricane has passed—which could put them in a tight financial spot.
Your payroll obligations during a storm or hurricane may extend beyond what we’ve discussed in this post. For example, a few states prohibit employers from disciplining or terminating employees who miss work during a declared state of emergency. So, be sure to check for additional federal and state statutes that may apply to your business.