Schools weren’t the only ones making snow day calls last week, thanks to the polar vortex’s assault on the Midwest. Several companies decided to close, as well.
For companies that already have a policy in place detailing whether employees will or will not be paid if there is a closure due to inclement weather or other emergency, the frigid weather probably was little more than a nuisance.
Companies that do not have such a policy in place probably should, according to David Fernstrum, an attorney with Mika, Meyers, Beckett & Jones.
He said he received a handful of calls from clients during the course of the day last Monday and Tuesday regarding what to do about employee compensation due to office closures.
“The questions that we get range from, ‘Do I have to pay employees if I didn’t open yesterday?’ to ‘Can I pay employees who couldn’t come to work due to weather problems?’” he said.
Fernstrum said the answers vary depending on the circumstances, including whether an employee is considered exempt or nonexempt under the Fair Labor Standards Act. Also, does the company have a collective bargaining agreement that details how it must handle inclement weather closures? And, how will either decision impact employee morale?
If an employee is exempt under the Labor Act, meaning the employee is salaried, then choosing to dock that person’s pay because the office was closed could jeopardize the employer’s ability to treat the employee as exempt and trigger overtime liability issues.
“With respect to exempt employees, it’s very important that employers not dock any pay for a day that the employer closes due to inclement weather or other similar emergencies,” Fernstrum said.
Nonexempt employees are those that are paid hourly, and employers are under no obligation to pay them for hours not worked, he said.
Even if an employer is under no obligation to pay employees for a day the business chooses to close, Fernstrum recommends weighing the impact the decision could have on employee morale.
If a closure decision was made after several employees already had made it to the office, for example, some employees might be unhappy to find that employees who didn’t get to the worksite will be getting the same pay as them, even though they made the effort to show up — turning the employer’s generosity into a contentious issue.
“Do I want to pay something extra to employees that made that extra effort?” might be the better question for the generous employer, and a solution that keeps everyone happy, he said.
In any case, Fernstrum said employers should be very careful their decisions don’t inadvertently treat employees who came in worse than employees who didn’t.
How much advance notice employees received might be another good way to decide whether or not to offer pay for a day the business was closed.
“Many employers draw the distinction along the lines of, ‘If I don’t tell you not to report and you show up, I’m going to give you a half day’s pay even if I don’t have any work for you. But if I give you notice in advance not to come in, then you don’t come to work and don’t get paid,’” Fernstrum said. “That is probably the vast majority of employers that do that.”
Fernstrum said employers should inform employees in advance about what to expect about compensation for a closed day because, otherwise, they are likely to assume they will be paid and finding out otherwise after the fact could lead to decreased morale.
Having an inclement weather policy is another way to manage employee expectations for how pay will be handled due to an office closure.
“Be careful of making policies to pay employees when the business is closed because you may find out that you are closed for a week or even two, which will get very expensive,” he noted.
Employers can create policies that limit pay to a certain number of closed days to ensure they haven’t over promised.
“Ultimately, we are really talking about who bears the risk of an emergency or a disaster,” Fernstrum said.