Yay for Snow Days! But Not When They Cause Compensation Headaches

Snow days are the best. They mean sleeping in, not shoveling the driveway and catching up on long-neglected favorite TV shows. But for many employers, snow days and inclement weather can cause confusion when offices need to close or employees want to work from home due to transportation problems.

Here’s the most common HR question that arises when weather turns nasty.

Do employers need to pay employees when bad weather forces the office to close?

It depends on a couple things:

  1. Employee classification
  • Most businesses are covered by the federal Fair Labor Standards Act (FLSA), which provides guidelines and restrictions for paying exempt and nonexempt employees.
  • Under the FLSA, for nonexempt employees, or those eligible for overtime pay, there is no obligation to pay for time not worked. However, under certain state laws, employers must compensate nonexempt employees under call-in/reporting pay laws. These pay obligations vary, so be sure to check your local laws. Because this is not the employees’ choice, they can either use paid time off or take the time as unpaid.
  • For exempt employees, who must be paid on a “salary basis” under the FLSA, the bottom line is that they must be paid their full salary if they perform any work in a workweek and if he or she is ready, willing, and able to work, deductions cannot be made for time when work is unavailable— even if the company is closed due to inclement weather. However, the regulations also state that exempt employees are not required to be paid for any workweek in which they perform no work. Therefore, if the office is closed for a full workweek, no pay needs to be compensated as long as no work is performed. Additionally, if the company is closed, an employer can require the employee to use their accrued PTO. Exempt employees may be required to use PTO for all or part of the day as long as the employees receive their full pay for the workweek. The key is that the exempt employee’s salary cannot be affected by PTO.
  1. Advanced notice or not
  • For nonexempt employees, if they are told in advance not to come to work and the employees stay home, then the employer is under no obligation to pay them for the time off. The employer and the employee can choose to use accrued PTO to compensate the employee for the missed workdays. However, in some states under reporting time pay laws, if an employee shows up without prior notice of an office closure, you may have to pay him or her for a portion of the day.
  • For exempt employees, the salary basis rule still applies. If state laws permit employers to do so, employers may deduct from the exempt employees’ accrued PTO balances to be “salary basis” compliant. The employer should ensure, however, that these employees have not done any work from home during the office closure. The FLSA does permit employers to make deductions from an exempt employee’s salary when he or she is absent due to personal reasons for one or more full days.

Confused about the differences between employee classifications? Learn more about exempt and nonexempt classification requirements.

Check back Tuesday when we explain what to do if the office is open, but public transportation is closed and how to deal with employees that want to work from home during inclement weather.