HR Management & Compliance

What Are the Pay Rules When a Disaster Forces a Workplace Closure?

We have realized that we
don’t have good policies for dealing with pay during emergencies. For example,
what if we have to close because of a power blackout? And, the few times we’ve
closed in the past, some people who lived close by came in to do some work
anyway. The people who stayed home were angry that we paid the people who
showed up. Can you give us some guidelines for managing pay in these

– Kevin H. in Grass Valley



The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.


This is a timely
question, particularly in light of the recent firestorms in California. Normally, an employer has to pay
nonexempt employees for half their regularly scheduled workday if they report
to work but aren’t put to work. However, the state Industrial Welfare
Commission Wage Orders don’t require an employer to pay nonexempt employees
when they cannot work because the employer has had to shut down for one of
these reasons:


1. Operations can’t
begin or continue because of threats to employees or property or a
recommendation from civil authorities.


2. Because of a failure
in their systems, public utilities cannot supply electricity, water, gas, or
sewer services.


3. An “act of God” or
other cause not within the employer’s control interrupts work.


Thus, in the scenario
our reader describes, the company isn’t required to pay the employees who live
close by and come in to work if they aren’t put to work because of severe
weather, a blackout, a fire, or the like. The company also isn’t obligated to
pay employees who are told not to come in and who stay at home. The company’s
choice to pay the employees who show up because they live close by doesn’t
create an obligation to pay the employees who don’t show up.


For good employee
relations, however, it would be best for the company to have a consistent
policy either to pay all employees who show up or not to pay any. If the
employer wishes to pay those who show up, the following policy statement for
nonexempt employees can prove helpful:


“Because of weather, power blackouts, and natural or man-made
disasters, it is sometimes necessary to shut down the company. In such cases,
employees who do not work because of such a shutdown will not be paid for the
days that the company is closed. Employees who show up for work but are sent
home before the end of the workday will be paid for half of their regularly scheduled
workday or for time actually worked, whichever is greater.”


Keep in mind that there
are different rules for exempt employees. An employer must still pay a full
week’s salary when an exempt employee performs any work in a week—even someone
sent home early or told not to come in because of a lack of work caused by a
natural disaster or other reason.


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