by ADP

With harsh winter weather already blanketing much of the country, now is the time to review rules for paying employees when your business is closed. Determining whether or not to pay your employee will depend on their status as an exempt or non-exempt employee, as well as applicable laws.

Non-exempt employees are employees who are typically paid on an hourly basis for all time spent working.

Exempt employees must meet certain salary and duties tests and are generally paid a set salary each week, regardless of the number of hours worked.

Below are three scenarios to consider during inclement weather.

#1: Full Day Closures

• Non-exempt employees: If the weather is so bad that you must close your business for the day, you are generally under no obligation to pay non-exempt employees, unless you have promised otherwise. Missed time because the company closed during a weather emergency isn’t considered hours worked. However, some employers choose to pay non-exempt employees under these circumstances.
• Exempt employees: If your company closes due to inclement weather, you must generally pay exempt employees their full salary, as long as they worked any part of the workweek.
  Note: Under federal law, employers may generally require both non-exempt and exempt employees to use accrued paid time off for the time missed due to inclement weather. However, if exempt employees do not have accrued paid leave available, they generally still must receive their full salary as long as they have performed any work within that workweek. Some states and local jurisdictions do not permit employers to require the substitution of paid leave in these situations. Check all applicable laws to ensure compliance.

#2: Workplace Remains Open

• Non-exempt employees: If you elect to keep the office open, you do not have to pay non-exempt employees for the time they miss when they choose to stay home or when they leave early.
• Exempt employees: If you remain open and an exempt employee chooses to stay home and doesn’t work at all for the full day, you may generally reduce the employee’s salary accordingly. This would likely fall under one of the few permitted deductions if the absence was due to personal reasons other than sickness or disability. However, if the employee works any part of the day, you must pay the employee his or her full salary.

#3: Early Closure/Late Opening

• Non-exempt employees: If the company closes early or opens late, federal law doesn’t require you to pay non-exempt employees for the missed time. However, you must pay these employees for any time they actually worked and/or were required to stay at work while your company made a decision to close. Check your state law for additional requirements for paying employees when they are required to report to work but are sent home early/come in late.
• Exempt employees: If you close early or open late, exempt employees who work any part of the workday must be paid their full salary.

Maintaining Productivity During Inclement Weather:

Below are four options to consider to help maintain productivity and boost employee morale when you and your employees are dealing with bad weather:

• Develop communication guidelines: Establish a procedure for contacting employees when the company unexpectedly closes due to inclement weather. Also, make sure employees are familiar with your company’s call-out procedures and instruct them to notify the company as soon as possible if they are unable to make it into the office.
• Telecommuting: If their role permits, allow employees to work remotely. This can ensure employees get their work done without having to travel in dangerous conditions. If you elect this option, set expectations with employees in advance to ensure they’re productive and that they properly track their time.
• Casual dress: Consider allowing employees to dress down during inclement weather. This simple perk can boost morale during bad weather.
• Children in the workplace: Allowing employees to bring their children to work can promote good will on the rare occasions they can’t find adequate childcare due to school or daycare closures. Set some ground rules in advance and make sure your work environment is suitable for children before offering this option to your employees.

Conclusion:

When preparing for inclement weather or other emergencies, consider drafting a written policy that communicates how you will inform employees of closings and how you will handle pay issues.