The FLSA and Inclement Weather: Paying Employees During Weather-Related Shutdowns

Over the holidays, a number of areas of the country experienced severe weather, from blizzard conditions to thunderstorms and tornadoes.  Blog readers and HR contacts in the industry have been sending questions, posting on social media, and calling with questions that go something like this:

Q.  We had some severe winter weather here that was so bad that the General Manager closed the office on Monday for the day.  This is the first time this has happened in years.  There were several employees who were scheduled off for vacation while others were scheduled to work.  How do you handle this time?  Do you still charge employees for vacation?  Would employees who were scheduled to work need to take PTO also?

Back when the DOL was still issuing them, it addressed this exact situation in a 2005 Opinion Letter and gave employers a clear roadmap for these inclement weather situations.  Most importantly, the rules for non-exempt and exempt employees differ, as I will explain below.

Non-Exempt Employees and Inclement Weather

Employers are only required to pay non-exempt employees for the hours that they actually work. The DOL explained that the reason why non-exempt employees do not work does not necessarily change this outcome.  If your office is open and just inaccessible to some employees or, as in the question above, you close the office completely due to inclement weather or some other natural disaster, the answer is the same.

One important caveat is for employers who have employees in the field or at remote offices.  Remember that closing your main office or a satellite office would not necessarily relieve you of your duty to pay non-exempt employees in the field or in other offices.  An employee who must wait out a storm while on duty may not perform actual work–sometimes for several hours–but the DOL would likely consider these employees to be on the clock.  If you are able to completely relieve your employees of duty, only then would their compensable time end (provided there are no travel time or commuting issues of course). Realistically, it will almost always be less expensive to pay for the limited time employees are stuck in the field than creating a dispute that would immediately cost you more than you “saved” by treating the time as non-compensable.

Exempt Employees and Inclement Weather

The way you must treat exempt employees is a bit different, though.  Section 541.602(b) of the FLSA regulations on the salary basis provides for only a handful of exceptions to the general rule that an exempt employee must be paid on a salary basis without deductions from pay. The regulations allow employers to make full day deductions when an exempt employee is absent from work for personal reasons, other than sickness or accident, or (under the right conditions) other types of unpaid leave (FMLA or disciplinary, for example). Making a full-day deduction in this instance would not impact an employee’s exempt status.  However, the first part of the same regulation explains that unless one of the limited exceptions applies, 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).

So, if you close your office due to inclement weather (or, really, for any other reason), you cannot make corresponding deductions from the salaries of your exempt employees. Doing so would affect the employee’s exempt status, since the deduction would not be for one of the approved exceptions. An employee will not be considered to be paid “on a salary basis” if you make deductions from their regular salary for absences that you occasion or that are caused by your business’s operating requirements. See 29 C.F.R. §541.602(a).  If your office is closed, the DOL considers your exempt employees’ absences as being occasioned by the closure or your business operation requirements.

If you do not close your office and an employee cannot (or chooses not) to come in to the office for whatever reason–be it inclement weather, public transportation issues, road closures, or states of emergency/travel bans, the DOL’s opinion letter explains that these full-day absences are considered absences for personal reasons.  Employers may deduct from an employee’s salary for any full days during which he or she performs no work for this reason (unless, of course, the employee uses accrued vacation or PTO pursuant to your leave policy).

I underlined full days for a reason, though.  Remember that for exempt employees, making deductions for less than a full day’s absence would violate the salary basis requirements.  An exempt employee who works from home for even part of the day, or who arrives 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.

When in doubt, pay the full salary.

Handling PTO Balances

Irrespective of the above, you can require exempt employees to take vacation or other paid time off during closures or at times during inclement weather when you are open but they cannot (or elect not) to make it to your office.  Although state and local law may differ, the FLSA does not require employers to provide paid time off to employees.  This means that employers can require employees to use vacation or paid time off on specific days or in specific situations, like inclement weather that either closes your office or prevents employees from getting to work. 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.  Accordingly, you can still deduct accrued leave time for an employee on days you close the office–even if the employee was already scheduled for vacation.

Volunteer Clean-Up/Recovery Work

Sometimes, inclement weather causes damage to equipment and facilities. We have covered the rules for volunteering at for-profit, non-profit, and public sector businesses in the past.  Those rules apply in this situation in the same way.  Employees cannot “volunteer” to help you clean up, rebuild, and repair.  Non-exempt employees must be paid for that working time, even if they want to donate it. Exempt employees must be paid, too, for the same reasons discussed above. For exempt employees, you can but are not required to provide additional compensation if they do help.

Upshot for Employers

A few parting tips in summary:

1. Above all else, you are free to pay employees for unplanned weather-related closures.  You can always do more than what is required by law, and it can be a great employee relations move if your bottom line can handle it.
2. For non-exempt employees, you are only required to pay them for the hours they actually work.
3. For non-exempt employees stuck in the field or at remote offices, look at their situations individually.  In most cases, you will need to compensate them for their time, even if they are unable to perform any work temporarily during storms.
4. For exempt employees, a closure does not permit you to make deductions from their salary, but you can require them to use PTO.
5. Your employees cannot volunteer their services to help you clean up, rebuild, or repair after a storm.
6. When in doubt about what to do, pay your employees for these rare events.