Ask the Experts: Office Closures Due to Bad Weather

The following question recently came from one of our clients requesting our assistance to better understand and manage this issue.

Question:  If our office closes due to a snow day or bad weather, how do we handle pay for our employees?

Answer: Pay questions under the Fair Labor Standards Act (FLSA) for partial (or full) day absences that are outside of both the employer’s and the employee’s control due to weather or other natural disasters naturally surface at this time of year.   Many states have laws covering this issue as well.  What follows below are the basic FLSA rules, so please check with your state rules for additional information.

Nonexempt/hourly employees. Under the FLSA, employers are not required to pay nonexempt, hourly employees if those employees perform no work, either for full or partial days.   This is true for most partial day closures, such as when employees report for work and then are told that there is no work for them (office closing due to bad weather).  In addition, the FLSA does not require an employer to “keep”  employees working for any specific number of hours or to pay them for hours they were assigned to work, but didn’t.  Some states may have additional rules that may require additional pay.  But even in states where this is not a requirement, many employers do pay something (minimum 2 hours, for example) for time not worked when an emergency or snow day forces an early closing. However, if the company operation is being kept open and employees are voluntarily allowed to leave early, these employees are usually not paid for the time off.

If, however, management asks the employees who do come to work in bad weather to remain while the office closing situation is being assessed, then those employees should be paid for the time spent at the office, even if they do no work.

Exempt employees. The rules for exempt employees are more difficult because the FLSA provides that employees classified as exempt are paid for the jobs they do on a “salary basis”, not the hours they work.  Under the FLSA, exempt employees should be paid their full salary for any work performed in that workweek.

Even though the FLSA does not require employers to provide any type of paid time off (vacation, personal time, sick leave, or holidays) to any workers, if the employer does have those programs, then the employer may substitute any paid time off (PTO) as a deduction from the exempt employees PTO bank to cover the pay for the time not worked due to the facility closure, even if it is less than a full day without affecting the salary basis of payment.  This is true as long as the employee still receives a paycheck equal to the employee’s guaranteed salary.

What this means if the employer closes the office for less than a full workweek, the employer must pay the exempt employee’s full salary even if:

  • There is no Paid Time Off program “leave bank”;
  • The employee has no accrued benefits in a company-provided leave bank or not enough paid time left in the bank (that would take the balance negative); or
  • The balance in the bank is already negative.

Further, if the company remains open during the bad weather, and an exempt employee is absent for 1 or more full days for personal reasons (transportation issues, weather-related housing or child care, etc.), then the salaried status will not be affected if deductions are made from the employee’s salary for such absences.

We recommend that you consider the FLSA and state requirements impacting your business, formulate your policy for handling office closures, outline how employees’ time off will be paid and managed, and communicate it to all employees.  Advance notice of what employees may expect in the event of an office closure can help to create a more open and positive employee relations environment.