If a company opens two hours late because of a snowstorm, should an employer pay employees who show up earlier because they didn’t hear the announcement?
What time does the workday end when employees are given the option to go home because an incident such as a gas leak forces evacuation of the building?
What if the employer sends them home subject to recall when the facility is safe again?
Compensating employees around facility closings can get tricky. Here are some tips from the compensation manager’s Bible, Employee Compensation in [Your State].
Plan Ahead
To some degree, these questions are governed by the FLSA, and many states have statutes covering this issue as well. That said, many of the issues are a matter of policy, and that means that employers should establish a policy covering the closing of their facilities, including what circumstances will lead to a closing, who makes the decision, how the decision is communicated, and what to do about employee compensation.
Make sure that all employees are notified of the policy, and you won’t have any surprises when you do have to close down.
Compensation.BLR.com, now thoroughly revamped with easier navigation and more complete compensation information, will tell you what’s being paid right in your state—or even metropolitan area—for hundreds of jobs. Try it at no cost and get a complimentary special report. Read more.
Compensation
As with most compensation questions, the first issue is whether employees are exempt or non-exempt.
For non-exempt employees, the underlying rule of the FLSA is that if they work during an emergency, they must be paid for those hours. This is true even if you called off work and told employees to stay home. If they show up and work, they must be paid.
And the converse is also true. If they don’t work–for example, if you send them home–you don’t have to pay them for the hours they miss. Nor are employers required to keep employees working for any specific number of hours or to pay them for hours they were assigned to work, but didn’t. (Under federal law, but some states do have minimum payment rules.)
That’s in theory. In practice, employers generally find a way to be more lenient. They may pay a full day even though workers only worked 6 hours because they came late due to bad weather or were sent home early. Or they may be able to let people work longer hours another day in the pay period to make up the time.
Try BLR’s all-in-one compensation website, Compensation.BLR.com, and get a complimentary special report, Top 100 FLSA Overtime Q&As, no matter what you decide. Find out more.
However, if a facility is being kept open and employees are merely permitted to leave early at their option, hourly workers are usually not paid for the time off.
If employees show up and are asked to stay until the situation is assessed, they must be paid even if there is nothing for them to do.
If employees are sent home subject to recall, the employer may be required to pay for the on-call time in certain circumstances.
In the next issue of the Advisor, we’ll look at exempt employees pay during disasters and how to handle hassles related to emergency pay, and we’ll introduce the all-compensation-in-one website, Compensation.BLR.com.
It can get complicated in California, where employers may have to pay reporting time pay when employees are required to report for work and does report but aren’t given work. If you send employees home because of weather, you don’t have to pay them reporting time pay, but you do have to pay them for all time that they are restricted to your premises or worksite while waiting out a rain or other weather delay.
Even if employees are relieved of all duty except for waiting for the weather to clear up, they must be paid their regular rate if they aren’t free to leave during that time.