With many offices closed today, and more likely to remain and be closed tomorrow, we wanted to remind employers about pay rules in place for weather-related closings.
Most exempt employees who are paid on a salary basis are not subject to pay reductions because of a business closure. Indeed, even if an exempt employee misses a full day of work, an employer may not reduce the employee’s weekly salary. It is important not to improperly reduce an employee’s salary because the employer could lose the ability to treat the employee as exempt from overtime pay requirements.
While employers will have to pay exempt employees their full salaries regardless of storm-related closures, employers can deduct from an exempt employee’s vacation or PTO leave bank for the work that is missed. If, however, an exempt employee does not have sufficient accrued vacation or PTO to cover the work time missed due to any weather closure, the employee must still be paid his or her full weekly salary. Further, while it is legally permissible to deduct time from a paid leave bank, as described, employers should consider whether other factors warrant that choice as well (such as any written policies on this topic, employee morale, company finances, past practice, and the like).
For non-exempt employees, federal law requires only that employees be paid for the hours they actually work. Therefore, non-exempt employees need not be paid for missed time due to weather closings. An employer can, but is not required, to consider whether to permit non-exempt employees to utilize paid leave to cover the time away. Again, written policies, employee morale, past practice and future consequences should be considered.
Employers should also remember that closed businesses notwithstanding, some employees may work remotely. Work performed remotely must be paid as if the work were performed onsite, even if the employer did not request that the work be performed. Employers should, therefore, be very clear and specific with instructions provided to non-exempt employees regarding whether work is to be performed remotely during an office closing.