For employers, preparing for winter weather includes ensuring all employees are paid properly on snow days. Many employers are surprised to learn that their payroll does not take a snow day when their employees do. While snow days are probably the most common application of the principles discussed in this article, these rules apply to most temporary closures regardless of the reason.
Somewhat counterintuitively, exempt employees have greater rights when it comes to temporary closures than non-exempt employees do. This is because exempt employees (with limited exceptions) are paid on a salary or fee basis, so a reduction in their hours typically cannot trigger a reduction in pay.
For exempt employees, if the business is closed for less than a week, exempt employees must be paid their full salaries. Under federal law, it is permissible to require the employee to use vacation days or other paid time off to cover the absence, but even if the employee has no available time off, it is not permitted to reduce the employee’s salary. It is also permissible to require the employee to make up the missed time. State law may vary on these issues. For example, Connecticut employers are not permitted to make a deduction from an exempt employee’s paid time off (or vacation, sick, personal, etc.) bank if the worksite is closed. This restriction does not apply to teachers, attorneys, physicians, and very limited other categories of exempt employees.
If the worksite is open but the employee chooses not to report to work (even if it is for very legitimate reasons, such as impassible road conditions), it is permissible to deduct from the employee’s salary or paid time off bank. But remember, if an exempt employee performs any work during the day (whether onsite or from home), the employee must be paid for the whole day. Partial-day deductions from a paid time off bank are allowed, even for exempt employees. So, if an exempt employee chooses to come in late due to road conditions, a portion of a day may be deducted from the employee’s paid time off bank.
While partial-day deductions in pay are never allowed for exempt employees in the private sector, exempt employees in the public sector may, in limited circumstances, receive partial-day deductions. This is only permitted when certain conditions are met and the deduction is required by a law, policy, or practice established pursuant to principles of public accountability. Due to complexities in this area, a competent labor and employment attorney with experience in the public sector should be consulted to determine whether a partial-day deduction is required.
Non-exempt employees are subject to much different treatment. In general, a non-exempt employee must only be paid for hours worked. Some passive time, such as on-call time, is considered “hours worked,” so it is possible some non-exempt employees will need to be compensated, even if they do not perform any actual work.
Some state laws require some form of payment for non-exempt employees who report to work and are then sent home early. In Connecticut, employees who work in restaurants (including hotel restaurants) must be paid for a minimum of two hours at their regular rate of pay if they reported or were called to work and were not given adequate notice the day before not to report. In the case of mercantile employees, there is a four-hour minimum, subject to the same notice requirements. (A partial waiver is available for mercantile employees in some cases, subject to approval from the Connecticut Department of Labor.) Other Connecticut employees are not required to receive any “report-in pay.” In other states, like New York, nearly all non-exempt employees are eligible for report-in pay, subject to specific requirements by industry. In addition, employers should count these hours as “hours of service” for purposes of the Affordable Care Act.
Recommendations for Employers
As discussed above, there are several circumstances in which an employer may make deductions from pay or a paid time off bank based on inclement weather. Many employers choose to pay all employees for the full day, without deducting from a paid time off bank, for administrative simplicity, employee morale, or other reasons. (Of course, a collective bargaining agreement may limit these choices. Employers with collective bargaining agreements should rely on the applicable contract and past practice to determine what is permissible.)
Whether or not to close the worksite can be a difficult decision and may be influenced by road conditions, the length of employees’ commutes, the nature of the job, whether schools are closed, production requirements, whether telework is possible, employee morale, and the amount of pay at issue. Unless the employee’s job is of a critical nature (e.g. hospital employees), employers should avoid subjecting an employee to discipline or termination for failing to report to work if the employee feels the road conditions are unsafe. Employers should communicate to employees beforehand how the employees will be notified of a worksite closure. Small employers typically will call each employee at home or send an email, while larger employers may announce a closure through a radio station or company website. Whatever you choose, make sure employees know whether they are expected to report to work.
Our team of labor and employment attorneys can assist you in keeping up with employee pay requirements and addressing other labor and employment law compliance issues.