Inclement Weather and Its Impact on Payroll

Ask a payroll professional how to manage employee pay for a national holiday, and he or she will know the answer - no problem. Sick day? Easy. A private company giving employees a special day off? Consider it done.

But what about a snow day? Or two? Three? What does payroll do during a blizzard? Or worse - a major disaster. So far in the United States, there have been at least 15 weather-related 'disasters.' And with those, come extended time away from offices - and work.

So, what to do?

The Fair Labor and Standards Act (FLSA) has guidelines in place. The FLSA mandates that employers pay their nonexempt employees no less than federal minimum wage for hours actually worked. Overtime must be given as well if nonexempt employees work more than 40 hours during a crisis. However, if an office does not have a telecommuting policy, this work be done in the office or place of business. If the weather is so bad a business shutters, nonexempt employees - under law - do not need to be paid.

Exempt employees have different requirements. An exempt, salaried employee who is willing to do work whether it be at a business’s location OR at his or her home must be paid. If he or she works even a few minutes during a day during a payroll week, he or she is entitled to that full day’s pay. For example, if a salesperson were to stay home during a snow day in Michigan but placed one or two outbound calls, he or she would be entitled to that full day’s salary.

Now the above situations only apply to weather that shuts a business down for a day or two. With a disaster, such as a hurricane or tornado, that requires long-term closures, there are different rules. Exempt employees do not need to be paid if one or more payroll weeks are void due to extended outages. That is if there is no effort to work. Absences due to weather and natural disasters are considered personal days for exempt employees. For instance, an exempt employee who can do work at home but chooses not to because of weather, isn’t required to be paid by law. Again, if he or she even works a few moments, and proves it, he or she will receive full pay for that day. And if he or she repeats a few moments of work each day during a shuttered week, he or she can receive full pay for the week.

If an employee - nonexempt or exempt - comes to work but is sent home because of weather, whether or not that employee is paid depends on the state’s law. Natural disasters can’t be avoided, but how a business handles itself during one can be perfected by keeping up with federal and state laws. If you’ve heard of a unique state law regarding inclement weather, let us know on PayrollTalk!