Does your business have an inclement weather policy?
Have you outlined and communicated company protocol when it comes to paying employees during a weather event? Do you have a plan in place to help keep employees properly paid – and business on track – when bad weather or a natural disaster strikes?
Whether your city faces major flooding or is covered in a record amount of snow, it’s imperative to know your company’s rights and responsibilities when it comes to paying your employees – and plan accordingly.
After all, trying to conduct business during severe weather can be challenging enough for your company, but it’s also extremely stressful for employees.
You can reduce everyone’s burden and restore peace of mind by planning ahead with appropriate policies and procedures. It’s important to communicate how payroll will work during a weather-related event, as well as emergency contact information and expectations for attendance.
Your unique business operations will drive what’s needed in your inclement weather policy.
For example, a hospital must have appropriate medical staff on site – 24 hours a day, 7 days a week. A retail bank, with operating hours of Monday through Friday, 8 a.m. to 5 p.m., will have totally different staffing requirements.
Regardless of such policies, you’ll need to be prepared ahead of time to process payroll according to federal, state and local rules and regulations.
Managing attendance during natural disasters
For employees to react appropriately to storms and their aftermath, they must first know what your company expects of them.
Before you, the employer, can communicate your expectations, you’ll need to know the answers to some important questions – especially when it comes to employee pay during inclement weather:
- What’s considered inclement weather for your organization?
- What is considered a natural disaster?
- Will there be different rules for inclement weather, versus natural disasters (e.g., flash flooding vs. a hurricane)?
- Does your company have tasks that must be performed regardless of the weather (and who is responsible for that work)?
- Who has the authority to close, delay opening or close early?
- How are essential responsibilities covered?
- Can some employees work from home?
- How will partial workdays be compensated?
- How will employees be contacted?
- How will changes in the business schedule be communicated?
- How will you pay non-exempt employees if the business closes?
- What are the reporting requirements for paying non-exempt employees?
- How will you pay exempt employees?
- How will payroll be processed and distributed during inclement weather and its aftermath?
It’s good practice to update emergency contact information at least annually, but even better to update it with every new hire. This ensures your company’s managers have correct phone numbers and email addresses readily available should a weather event suddenly occur.
Your company should have a well-thought-out disaster recovery plan that outlines the company’s expectations for reporting in and attendance. Is an email or a text preferred? How much notice is required? Do you expect employees to contact their manager daily about their status?
Whatever protocol you establish, spell it all out for employees ahead of time.
Keep in mind that any expectations about communication between employees and managers should accommodate the realities of overwhelmed or damaged phone and power lines.
Paying non-exempt employees during weather events
Ideally, every business could afford to continue paying employees their full wages even if the company must close due to storms, snow, flooding, wildfires or some other natural disaster. However, that’s not always something a business can afford to do.
Still, there are many legal requirements an employer needs to be aware of when it comes to paying non-exempt and exempt employees during a weather event.
Under the Fair Labor Standards Act (FLSA) employers are required to pay non-exempt (hourly) employees for actual hours worked. Therefore, an employer is not required to pay non-exempt employees for their entire shift if they’re sent home early. However, applicable state law may require payment of a minimum number of hours.
Some states have adopted “show-up pay” or “report-in pay” laws that provide some minimum guaranteed pay for non-exempt employees who arrive for work but are sent home early. So, it’s important for you to be aware of any applicable state laws that govern how non-exempt employees are paid in such circumstances.
Simply put, if your non-exempt employees show up and work for only an hour before the decision is made to close due to weather, you are only required to pay them for the hour worked, according to federal law.
If an employer’s practice is to allow non-exempt employees to use vacation or PTO in the event of a closure, it should be identified in the inclement weather policy to provide clarity for employees.
And here’s an entirely different scenario. If the non-exempt employee makes it to work and is unable to leave after their work shift (due to weather) and continues to work, the employer must pay them for time worked, including overtime if applicable.
Paying exempt employees during weather events
It’s a bit more complicated when it comes to paying exempt employees during and after a disaster. Under the FLSA, there are specific criteria that define when an employer can deduct wages from an exempt employee.
An opinion letter from the Department of Labor states that if the employer closes the business due to inclement weather (or other natural disaster) for less than a full work week, and the exempt employee performs any work that week, the employer must pay them their full salary.
However, if the business is closed for a full week due to inclement weather, the employer is not required to pay exempt employees for that week, as long as no work is performed.
That’s why it’s important to communicate clear expectations to employees. If work is performed, even if the business is closed, your employees must be paid.
The reverse scenario would be when the business remains open during a weather event and the exempt employee is not able to come to work due to hazardous conditions. In this case, the Department of Labor states that the business may make deductions to pay or require the employee to use accrued PTO or vacation.
Under these circumstances, PTO can be taken in full or partial days according to your company’s PTO policy. If the employee does not have PTO or vacation hours accrued, and they don’t perform any work, you – the employer – are not obligated to pay them.
But it’s important to note that pay should only be deducted for full-day absences. If an exempt employee with no PTO balance misses only half a day, the employer must pay that employee his or her salary for the entire day – with no partial deduction for the absence.
Given the complexities involved with paying both exempt and non-exempt employees appropriately during inclement weather, it’s wise to consult with a professional employer organization (PEO) or attorney to better understand your obligations under such circumstances.
Using paid time off
It’s a good idea to make sure your inclement weather policy specifically outlines how and when paid time off (PTO) can be used, should an employee need to miss an extra day or two.
Though employers can require an employee to use PTO for such situations, an employer generally should not discipline an employee who has exhausted their balance of paid time off due to inclement weather.
Particularly if your employees accrue time beginning in January and must use up their balance by the end of the year, it can be helpful to build some flexibility into your time-off policy.
This means you may want to consider giving managers the authority to let an employee create a negative balance of one or two days, should a blizzard hit in January before they’ve accrued any time off. This approach can become complicated, however, particularly if the employee leaves the company before eliminating their negative leave balance.
Final points to note
Businesses that provide essential services during chaotic times, such as hardware stores or media outlets, should make it clear to all job applicants and current employees if their presence is expected during bad weather.
Though it’s not wise to terminate an employee for their inability to show up during or after severe weather, it is perfectly reasonable to ask why they can’t come in and record their non-attendance.
Once your inclement weather policy regarding employee pay has been created, you should distribute it to all employees and include it in the employee handbook. Keeping your employee handbook updated ensures employees always know where to find critical information and are able to refer to it at their convenience.
Need help identifying and implementing more administrative policies to help your business thrive even in difficult times? Download our free e-magazine: The Insperity guide to crisis management.