Severe weather may cause you to temporarily close your business or modify employees’ work schedules. Here’s how to create a payroll policy that addresses inclement weather.
Due to severe weather, you may have to temporarily close your doors or modify employees’ work schedules. At the very least, you’ll likely experience some type of operational disruption. It’s therefore very important that you have a payroll policy that addresses inclement weather.
Next are essentials to keep in mind when drafting your inclement weather pay policy.
General FLSA requirement
The Fair Labor Standards Act (FLSA) requires covered employers to pay nonexempt employees no less than the federal minimum wage for all hours worked plus overtime pay for work hours exceeding 40 in a week. According to the United States Department of Labor (DOL), “These requirements are not subject to waiver during natural disasters and recovery efforts.” This rule pertains to inclement weather as well, such as severe snow, rain, cold, hail, and dust storms.
Compensation for nonexempt employees
As stated, the FLSA says that nonexempt employees must be paid for all hours worked, regardless of weather conditions. Therefore, if you close your business because of inclement weather, you must pay nonexempt employees for all hours worked up until the business closure. This applies to both onsite and remote employees. State wage-and-hour laws typically mirror the FLSA in this regard.
However, there are some special circumstances to look out for, such as reporting time pay, waiting time, predictive scheduling laws, and employment contracts.
The FLSA says that nonexempt employees must be paid for all hours worked, regardless of weather conditions. Therefore, if you close your business because of inclement weather, you must pay nonexempt employees for all hours worked up until the business closure.
Reporting time pay
In some states, employers must give employees reporting time pay if they show up for work as scheduled but are sent home early. States such as California, Connecticut, Massachusetts, New Hampshire, New Jersey, New York, Ohio, and Rhode Island all have reporting time pay laws. The requirements vary by state, and there may be exceptions.
For example, the California Department of Industrial Relations says that California employers do not have to provide reporting time pay “when the interruption of work is caused by an Act of God or other cause not within the employer’s control, for example, an earthquake.”
Per the DOL, whether waiting time is hours worked and therefore should be paid depends on the facts of the situation. Generally, if an employee was “engaged to wait,” they should be paid for the time spent waiting. But if they were “waiting to be engaged,” then they do not have to be paid for the time spent waiting.
Let’s say you require your employees to stay at work while you try to figure out whether you should close early due to inclement weather. In this case, your employees are “engaged to wait” — whether actively working or not — and should be paid for the time spent waiting.
Predictive scheduling laws
Employers that fail to comply with predictive scheduling laws may have to pay a penalty to the impacted employee. However, some predictive scheduling laws exclude employers from penalty.
The state of Oregon and some local jurisdictions — such as San Francisco, New York City, and Chicago — have predictive scheduling laws, which require covered employers to give nonexempt employees advance notice of their work schedules. Employers must communicate any changes to employees’ work schedules by no later than the state-mandated time frame.
Employers that fail to comply with predictive scheduling laws may have to pay a penalty to the impacted employee. However, some predictive scheduling laws exclude employers from penalty, such as when a scheduling change occurred because of a natural disaster or potentially severe weather.
Compensation for exempt employees
When it comes to exempt employees, inclement weather pay is a little trickier. Here’s a breakdown of how it works:
- Generally, exempt employees must receive their entire salary for any workweek in which they perform any work, including during inclement weather and natural disasters.
- You can dock an exempt employee’s salary only if the deduction is legally permissible.
- A business closure caused by inclement weather is not a legally permissible deduction.
- An exempt employee must receive their full salary for the day if you send them home early because of inclement weather.
- If your business closes for an entire week and an exempt employee does not perform any work during that week, then you do not have to pay them for that week.
- If your business stays open during inclement weather, but an exempt employee takes a full week off for personal reasons, you do not have to pay them for that week.
Paid time off
Normally, you can require nonexempt and exempt employees to use their available paid time off (PTO) for full-day or partial-day absences stemming from inclement weather.
In addition, if:
- Your state or local government mandates paid sick leave, check to see whether payment for inclement weather is allowed under the paid sick leave law.
- A nonexempt employee has exhausted their PTO, you only need to pay them for time worked — unless a statute or an employment contract says otherwise.
- An exempt employee has exhausted their PTO, you must still pay them their full weekly salary if they performed any work for the week.
If an employment contract or collective bargaining agreement requires payment to nonexempt or exempt employees during inclement weather, you must honor the agreement.
Policy questions to address
There are many questions to consider when preparing your inclement weather pay policy, including the following:
- What specific events constitute inclement weather for your business?
- What events are regarded as natural disasters?
- Will the same pay policy apply to both inclement weather and natural disasters?
- What are your payment guidelines for nonexempt and exempt employees?
- What are your timekeeping protocols?
- How will your employees clock in and out if permitted to work during inclement weather?
- What is your position on unscheduled work and unauthorized overtime, including during severe weather?
- How will managers edit and submit employee time cards?
- What are your criteria for PTO use and inclement weather?
- Do you have a continuity plan for getting payroll done when adverse weather hits?
- How will you retain payroll records during inclement weather?
- How will you handle final paychecks if you must permanently close your business?
- Have you encouraged all employees to sign up for direct deposit to help ensure timely payments?
- How will you facilitate communication with employees, including for payroll issues, if bad weather forces you to close early or temporarily?
- Will you include your inclement weather pay policy in your employee handbook? (Note: you should).
Your inclement weather pay policy must take applicable federal, state, and local laws into account. Moreover, it should be written with the assistance of legal counsel and effectively communicated to all employees.