Make sure your business is prepared for an emergency by developing and communicating clear policies and procedures.
Severe weather typically increases throughout the spring and summer, and fall and winter storms can bring heavy rain, powerful winds and snow. Since severe weather and other emergencies can impact any business, all employers should have a plan in place to prepare and respond. To help, here are some answers to common employer questions about employee pay and weather emergencies.
Q: We were closed for an entire day because of the weather. Do I have to pay non-exempt employees for that day?
A: Non-exempt employees are paid only for "hours worked." Therefore, if non-exempt employees miss an entire day's work because you are closed and you didn't require them to report to work, you are generally under no obligation to pay them, unless you have promised otherwise. However, some employers choose to pay non-exempt employees under these circumstances.
Note: Under federal law, non-exempt employees are typically paid on an hourly basis and are entitled to at least the minimum wage for each hour worked and overtime whenever they work more than 40 hours in a workweek. Certain state laws may have additional overtime requirements.
Q: What about exempt employees? Do I have to pay them when we close because of the weather?
A: Exempt employees must generally receive their full salary in any workweek in which they perform work, regardless of the number of hours worked. Therefore, if your company closes for less than a full workweek due to inclement weather, you must generally pay an exempt employee their full salary, as long as the employee worked any part of the workweek.
Q: My company was forced to close six hours early because of a storm. Do I have to pay non-exempt employees for the time they missed?
A: If the company closes early, federal law doesn't require you to pay non-exempt employees for the missed time, unless you promised otherwise. However, you must pay these employees for any time they actually worked. Note that some state laws require employers to pay employees for a minimum number of hours when they report to work but are sent home before the end of their scheduled shift. Check your applicable law for rules related to paying employees when they are required to report to work but are sent home early.
Q: Our non-exempt employees reported to work and we asked them to wait while we made a decision about whether to close. If we ultimately decided to close and they performed no work while waiting, do I have to pay them for that time?
A: Yes, if employees were required to stay at work while your company made a decision to close, the employees are entitled to pay for the time. As mentioned above, check your state law for additional requirements for paying employees when they are required to report to work but are sent home early.
Q: We remained open during bad weather, but some employees decided to stay home and others left early. Do I have to pay them for the missed time?
A: You don't have to pay non-exempt employees for the time they miss when they choose to stay home or leave early. For exempt employees, it depends on whether the employee is absent for the full day or a partial day. If you remain open and an exempt employee chose to stay home because of the weather, and doesn't work at all, you may generally reduce the employee's salary accordingly. This would be considered one of the few permitted deductions if this were an absence for personal reasons other than sickness or disability. However, if the employee works any part of the day, you must pay the employee their full salary. Additionally, if you choose to close, you must pay exempt employees their full salary regardless of whether it is a partial- or full-day closure.
Q: An employee stayed home even though we remained open during bad weather. We later discovered they performed work remotely during the day, including checking and replying to email from home. I didn't give them permission to do this. Do I still have to pay the employee for this time?
A: Yes. If the employee is non-exempt, they must receive pay for any time actually spent working, including checking and replying to email, regardless of whether it was authorized in advance. If the employee is exempt, they must receive their full salary for that workweek.
Q: What steps can I take to ensure that operations will continue during an emergency?
A: To ensure that your company continues to run smoothly during an emergency, develop contingency plans and identify essential business functions, equipment and staff. This may include having a generator to keep company equipment and computer servers operating, backing up data in a separate and secure location, and/or maintaining equipment that permits employees to work remotely. Make sure you train employees on your plan, so they're aware of company expectations and procedures during an emergency.
Q: I am worried about being able to communicate with employees during a weather emergency. What can I do?
A: Since power outages are possible, you should have multiple ways to contact employees during an emergency, including cell phone and landline numbers and personal email addresses. Obtain this information upon hire and instruct employees to report changes to their contact information in a timely manner. Prior to the arrival of a storm, ask employees to verify that their contact information is up to date. Additionally, consider designating a central location for employees to get information on business closures and other related issues, such as the company's website or a dedicated phone line. During an emergency, communicate with employees regularly and let them know when and how to expect updates.
Q: What factors should I consider when deciding whether to close during severe weather?
A: The decision to close isn't always an easy one, but your priority is to keep employees safe. To help make the decision, establish guidelines in advance. For instance, if a state of emergency is declared and highways are closed or restricted, employers often choose to close. In the absence of a business closure or official declaration, you may want to advise employees to use their best judgment to determine whether it is safe to travel on roadways, keeping in mind that employees may be impacted differently depending on where they live.
Q: What are some options for distributing paychecks during an emergency?
A: You can encourage employees to sign up for direct deposit by noting the benefits and explaining that the distribution of paychecks at the workplace may be delayed during an emergency. You may also want to consider a backup distribution point for emergency situations.
Q: An employee requested leave in the aftermath of a hurricane. Am I required to grant it?
A: Employees may be entitled to leave during and/or after an emergency under some laws. For example, employees who participate in relief efforts (such as volunteer emergency responders and National Guard members) may be entitled to leave under state and/or federal law. Employees with injuries or illnesses resulting from severe weather (or who have a family member who has suffered one) may also be entitled to leave.
Absent a specific requirement, try to be flexible and understand employees impacted by the storm may have a greater need to use leave to take care of personal responsibilities, such as filing insurance claims, securing new housing, and taking care of affected family members. Employers may want to consider relaxing leave policies after an emergency or even allowing employees to donate paid leave to other employees who suffer a greater impact from a storm.
Q: Is there any assistance available for employers and employees in the aftermath of a weather emergency?
A: If you have an Employee Assistance Program, remind employees that they can use this resource after an emergency. Additionally, depending on the state, employees may be entitled to unemployment compensation or other aid for missed work due to the storm. Assistance from the Federal Emergency Management Administration may also be available. Further, in the aftermath of certain disasters, the IRS may provide tax relief to employers and employees, such as:
- Extended deadlines for filing returns, paying taxes and completing certain other time-sensitive responsibilities.
- An employee retention tax credit to assist employers that had active locations within the impacted area that were rendered inoperable for a period of time, yet the employer kept paying employees.
- Favorable tax treatment for employees who forgo their accrued vacation, sick or personal leave in exchange for their employer making cash donations to charitable organizations.
For more information, visit the IRS website.
Read other general payroll FAQs: Common frequently asked payroll questions (and answers)
This article was originally published as an "ADP HR Tip of the Week" which is a communication created for ADP's small business clients.