As I watched the news this morning, I thought of the pay quandaries HR managers or business owners in Boston, Massachusetts, or West, Texas, face.
The events occurring in Boston, where the entire city population was asked to stay at home and commuter transportation was shut down because of terrorism threats and employees either could not get to work or wisely decided not to venture out to work, kept employees from getting to work. In West, Texas, where most of the town was physically shut down by the destruction resulting from the fertilizer explosion, or workers were personally affected by the tragedy and needed to deal with their personal situations, many or most workers did not get to work. These situations pose tough questions on how to pay those employees who were not working.
The issues are similar to those occurring during Hurricane Sandy last fall, or any natural disaster or severe weather event. Employees simply may not be able to get to work, they choose not to try to come to work out of concern for their personal safety, or they may have personal crises to deal with that take precedence over work.
Exempt Employees’ Pay Issues
Technically, if an employer stays open, despite the occurrence of such an event, the Fair Labor Standards Act (“FLSA”) allows it either to dock exempt employees’ pay for full days they miss and do not work from home, or to require exempt employees to use vacation pay to cover such time, if permitted by state law. (Partial-day deductions for exempt employees are not allowed.) Practically speaking, a large number of exempt employees might be able to continue working from home and thus be entitled to be paid anyway. If they cannot work from home, though, an employer might be legally justified in docking pay for full days missed if the business remained open.
If, however, the employer actually closes for part of the FLSA workweek, but exempt employees still work the rest of that week, those workers cannot be docked, and they must be paid their usual full salary.
So, does a responsible employer stay open regardless of the events happening around it and not pay those exempt employees who do not come in to work or cannot work from home (if a full day), or close down and pay all exempt workers’ full salary for the workweek anyway? Lots of factors–financial, safety, and emotional–play into the decision.
Another issue occurs if exempt employees take part in a substantial amount of “nonexempt” work such as clean-up or restoration to enable the business to reopen after a disaster. The employer may be wise to reclassify them as nonexempt for the period of time they are performing what would be nonexempt duties if the hours worked would trigger overtime pay under those conditions. This can be especially tricky.
Nonexempt Employees’ Pay Issues
The general rule is that nonexempt employees do not have to be paid if an employer is closed and nonexempt employees are not performing work from home. On the flip side, if the disaster such as that in West, Texas, calls for lots of clean-up and restoration work before normal work can resume, the usual overtime pay rules apply for nonexempt employees who work more than 40 hours as part of the catch-up activities.
On-Call Time Issues
If nonexempt employees are waiting to be called back to work upon the business reopening, with a short response time to report back to work, and thus are not free to use the on-call time for their own purposes, they must be paid for on-call time.
Employers may decide it is worth the goodwill it shows to its employees to pay them even if the business is closed and FLSA does not require them to be paid. This is especially true if an employee or his or her family has been the victim of a disaster. Unfortunately, not all employers have the financial ability to underwrite such goodwill payments for a large number of employees, or for more than a short period of time.
Adair Buckner is an Amarillo attorney with Buckner & Cross, L.L.P. She is Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization. Her other areas of practice include business law, business disputes, commercial litigation, estate planning, and probate. You can reach Adair at (806)-322-7777 or firstname.lastname@example.org. This material is not intended to be legal advice. The contents are intended for general information purposes only.
To learn more about Adair and her practice visit her profile page andhttp://www.bucknercross-law.com/labor-and-employment-law/ .