Wage & Hour Webcast
Enjoy a pre-recorded chat with attorneys and insurance experts as they explore the Department of Labor's new Regulatory Agenda of "finding noncompliant employers."
As they say, "You can't fight Mother Nature." For those of us living near the coast, the threat typically comes from hurricanes, while snow is frequently the culprit for those living up north. Regardless of the cause, workplace closures are often occasioned by inclement weather. And, while most employers have contingency plans for maintaining production and service during workplace closures and absences caused by inclement weather, many employers do not address the manner in which employees must be paid in such cases.
Unfortunately, an employer's failure to abide by the requirements of the Fair Labor Standards Act (FLSA) during a weather-related event may jeopardize the exempt status of certain employees. Accordingly, employers must follow the FLSA's requirements as they pertain to docking exempt employees' pay in response to absences occasioned by inclement weather.
Since the executive, administrative, and professional overtime exemptions rely, in part, on the fact that such exempt employees are paid on a ‘salary basis,' it is important that employers not violate the salary basis rule. Under the FLSA, improper deductions from an exempt employee's salary can defeat their salaried status, which, in turn, will void their exempt status. Therefore, if the workplace is closed or absences occur because of inclement weather, employers must proceed cautiously when it comes to deducting pay from those employees who were absent from work.
Under the FLSA, a salaried employee is generally entitled to receive his or her entire weekly salary regardless of the quality or quantity of work performed. In other words, an exempt employee must receive his or her full salary for any week in which the employee performs any work, without regard to the number of days or hours worked. Unless a deduction is expressly allowed, an employer cannot deduct from an exempt employee's salary even if an employee misses part of a workweek as a result of inclement weather.
One such permissible deduction applies when an exempt employee is absent from work for one or more full days for personal reasons, other than sickness or disability. The Department of Labor considers an employee's absence due to adverse weather conditions, when the employer remains open for business, as an absence for personal reasons. Thus, an employer that remains open for business during a weather emergency may lawfully deduct a full-day's absence from the employee's salary. Such a deduction will not violate the salary basis rule or otherwise affect the employee's exempt status.
However, it is very important to note that deductions from salary for less than a full-day's absence are not permitted. For example, if an exempt employee is absent for two and a half days due to adverse weather conditions, and the employer remains open for business, the employer may deduct for the two full-days' absence, but the employee must receive a full-day's pay for the partial day worked.
The rule is a bit different in cases where the workplace is forced to close because of the inclement weather conditions. In such cases, the employer may not make deductions for absences occasioned by the employer or by the operating requirements of the business. So if an employer closes operations due to a weather-related emergency for less than a full workweek, the employer must pay an exempt employee the full salary for any week in which the employee performs any work because deductions may not be made for time when work is not available. Under the FLSA, if an employee is ready, willing and able to work, deductions may not be made for time when work is not available.
The rules are simpler when dealing with non-exempt employees. Non-exempt employees are generally only entitled to payment for hours worked. If a non-exempt employee misses work, regardless of whether the employer remains open, then such employee is not entitled to payment for such time. However, it is not uncommon for employers to pay non-exempt employees despite the absence of a legal obligation to do so in order to preserve employee moral. A fixed number of ‘snow days' is a good example of this policy.
When weather impedes an employer's operation, either by requiring a closure of the workplace or by preventing employees from making to work, it is critical that employers comply with the technical requirements of the FLSA. In cases involving exempt employees, violations in this regard can result in the loss of the exemption, thereby potentially exposing the employer to severe overtime issues. Employers must ensure that any deductions are proper; otherwise, the damage may come from a source other than Mother Nature herself.
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