Snow Days: Fun for kids, headaches for employers

Snow days are fun for kids. They get off school. They build snowmen. They sleigh.

For adults, snow days are not nearly as much fun. And, for employers who need their employees to show up for work, on time, and ready and able to work, snow days are no fun at all. Below, we take a look at an issue that employers often face when inclement weather hits...

To pay or not to pay (employees who miss work because the business is closed for inclement weather), that is the question.

The issue is whether an employer must pay employees when the business is closed for inclement weather. Seems like an easy one, right? No work. No pay. Well, if that was your answer, you would be partially right.

Federal and state laws govern how employees must be paid when a business is closed for inclement weather. The first consideration in determining which employees get paid and which employees do not, is to look at the classification of the employee. For compensation purposes, the Fair Labor Standard Act (FLSA) rules require different treatment of exempt and non-exempt employees during inclement weather shutdowns.

Non-exempt employees

Non-exempt, or (mostly) hourly, employees are the most straight-forward category of employees to work with on this issue, so we will start there. Under the FLSA, employers are only required to pay non-exempt employees for hours spent actually working. That’s where the "No work. No pay” rule actually works and is applicable. You see, an employer is not obligated to pay a non-exempt employee for time not worked. This is true even when the employee was scheduled to work, but precluded from working due to bad weather or when the employee was sent home early because of bad weather. This means that if a business does not open or is forced to shut down early because of inclement weather and sends its non-exempt employees home, the employer is only required to pay the employee for time actually spent working.

However, some states, like California, have “report-in laws” that require an employer to pay a non-exempt employee if the employee is scheduled to work and sent home early. These laws require employers to pay non-exempt employees for a guaranteed number of hours per day so long as they show up for work, regardless of how many hours the employee actually works. There are only a few of these states, and Ohio is not one of them.

It is also important to keep in mind that as our technology-based workforces become more virtual, many non-exempt employees can perform work from home. In this case, if a non-exempt employee works remotely, the employer must pay the employee for that time. Employers dealing with such employees can either instruct their non-exempt employees not to work remotely via policy, and/or remind them that if they do work remotely to accurately track their time and ensure the employees have proper tracking/reporting capabilities. If a non-exempt employee, however, fails to heed the employer’s policy not to work remotely and does anyway, the employer is not off the hook and still has to pay the employee. The employer, however, can discipline the employee for violating the employer’s policy.

Exempt employees

Exempt (salaried) employees are different, and, almost always, must be paid for days off due to inclement weather. If “no work, no pay” is the golden rule for non-exempt hourly employees, then the equivalent golden rule for exempt employees is that “unless there is an exception, exempt employees must always be paid.” In other words, exempt employees must be paid for the whole week for any week they perform any work. You read that right: unless there is a statutory exception, exempt employees must be paid for a full week of work if they work any amount of time, no matter how small. As for those exceptions, well, the FLSA sets out a number of instances where an employer may dock an exempt employee’s pay. See 29 CFR § 541.602. While some of the instances on the list are less than crystal clear, one thing is: none of them include docking an employee’s pay because the employer’s business is closed. Meaning, employers cannot dock an exempt employee’s pay because it closes the business, not even for inclement weather. In fact, the only time an employer can dock an exempt employee’s pay due to inclement weather would be if the employer closes the business for an entire week and the exempt employee did not work that entire week. If the exempt employee worked even one day that week, the employer must pay the employee for the entire week, unless another exclusion applies.

While employers must pay exempt employees for most inclement weather closures, they can require exempt employees to use their paid time off in the event of a business closure. For this reason, it is a good idea for employers to consider including a policy in their employee handbook to cover this and require usage. However, in the event the exempt employee does not have enough paid time off to cover the absence, the employer cannot deduct the difference from the exempt employee’s salary.

The situation changes, however, when the business is open and the exempt employee chooses to stay home. For days when an exempt employee voluntarily decides not to work, the employer can deduct accrued leave from the employee’s leave availability. If the exempt employee is not eligible for accrued leave or has exhausted it, the employer may make reductions from pay for whole day absences. This scenario is typically covered under 29 C.F.R. §541.602(b)(1) because it is usually deemed “personal time, other than sickness or disability.”

The Department of Labor has issued two Opinion letters that provide some additional guidance on this issue: 2005-46 Salary Docking for Weather Related Absences and 2005-41 Leave Taken During Inclement Weather.

Employer takeaway

Just because the kids have a snow day, doesn’t mean you do too. Look at how your employees are classified before you determine whether they get paid for a company closure or not... and make sure you pay accordingly.