We have both a construction staff and an office staff, and we’re trying to put together a policy for paying employees in the event of an emergency. What happens if the construction staff needs to be sent home during inclement weather or the office staff and upper management can’t work because their computers are down? What if we’re forced to completely shut down? How would pay be determined for nonexempt as well as exempt employees in these kinds of circumstances? — Mark in Danville
After watching the recent news coverage of flooding in the Midwest, not to mention the raging wildfires near Santa Barbara, it’s certainly prudent to think about adopting a policy to handle pay in the event of unusually rough weather or natural disasters. What you should do in terms of paying your construction and office staff in any type of emergency will depend on whether the employees are nonexempt or exempt.
Rules for Nonexempt Workers
Your nonexempt employees are covered by California’s reporting time rules. If the nonexempt employees are already at work for the day and your company decides to send them home, you must pay them for any hours actually worked. But if nonexempt employees worked less than half of their regularly scheduled workday when you decided to send them home or shut down, you must pay them for half of their usual or scheduled day’s work, but no less than two hours or more than four hours, at their regular pay rate.
If the company asks a nonexempt employee to report to work for the second time during a regularly scheduled workday, but then provides the employee with less than two hours of work, the company must pay the employee for two hours at his or her regular pay rate. Note that nonexempt members of your construction staff who work at a construction site and are covered by a collective bargaining agreement are subject to the reporting time rules, unless their union contract states otherwise.
Your company does not have to apply these reporting time rules if it shuts down operations: 1) at the recommendation of local authorities; 2) because threats to employees or property make it impossible to remain open; 3) because the business does not have electricity, water, or gas, or there is a problem with the sewer system; or 4) due to an “act of God” or some other cause outside the company’s control. If you close for any of these reasons, the company owes nonexempt employees only for the time they worked before being sent home for the day.
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The reporting time rules also do not apply to nonexempt employees your company places on call to handle any type of emergency as long as they’re paid for being on standby. These employees will instead receive their on-call pay while in a standby status and their regular pay rate and any applicable overtime for the time they spend responding to calls.
It’s a good idea to have a system for contacting all of your employees before they head into work during bad weather or some other emergency. If you can let your nonexempt employees know in advance that they don’t need to report to work, your company won’t owe them any pay if they miss a regularly scheduled workday, regardless of the reason for the closure.
Rules for Exempt Workers
In an inclement weather or disaster scenario, your company’s pay obligation to its exempt employees depends on how long your operations stop. Exempt employees generally are entitled to receive their full salary for any week in which they perform any work, regardless of the number of days or hours worked in the workweek. If you close down for less than a week, your exempt employees must still be paid their full salary for that week if they have worked at all. But if the company decides to close for an entire week, you do not have to pay exempt employees for that week, as long as they do not perform any work for the company. If your exempt employees continue to work from home during a shutdown, even for part of the day, the company must pay their full salary for the week, unless you expressly instructed them not to work from home during the shutdown.
Additional Considerations
It’s possible that emergency conditions may require some employees, both nonexempt and exempt, to work longer hours so that the company can continue operating or resume operations. Expanded schedules for nonexempt employees may trigger some of the less frequently applied overtime requirements. Nonexempt employees are entitled to time and a half for the first eight hours of work performed on the seventh consecutive workday in one workweek. They must be paid double time if they work more than eight hours on the seventh consecutive workday in one workweek or more than 12 hours in a workday.
If your exempt employees also must work more than their standard workweek during an emergency, you have the option of compensating them for that extra time on an hourly basis without jeopardizing their exempt status. Exempt employees do not have to be compensated for additional work under the same overtime rules that apply to nonexempt employees. You can choose to pay them overtime at any point beyond eight hours in a workday or 40 hours in a workweek. Whatever additional compensation you choose to pay must be paid on an hourly basis.
Lori Bien, Esq., provides employment law counseling, investigation, and training services as principal in the Law Office of Lori Bien in San Francisco.