Pay, time off issues for office closings due to inclement weather

February 2, 2007

Excerpted from Indiana Employment Law Letter, written by attorneys at the law firm Baker & Daniels

by Susan W. Kline

With winter weather upon us, including snowy and icy road conditions, employers are faced with the prospect of lost time when employees can't or don't report to work because of inclement weather.

Not only do absences due to bad weather reduce productivity, but they also raise a number of issues about how the time off should be treated when tracking attendance and calculating pay. Must you pay employees who don't report to work because of weather conditions? Can you charge them with vacation or other paid time off (PTO) for missed work?

The U.S. Department of Labor (DOL) has issued some guidance to help you understand your payroll obligations and rights when bad weather affects employee attendance. The guidance particularly warns employers to exercise caution in docking the pay of exempt employees who miss work because of inclement weather.

What happens when an employer closes because of inclement weather?
Let's start with exempt employees. The Fair Labor Standards Act (FLSA) prohibits you from reducing the pay of any exempt employee based on the quantity or quality of his work or when he is ready, willing, and able to work but no work is available.

Applying that basic principle, the DOL has taken the position that employers that decide to close because of weather conditions must pay exempt employees their regular salaries for any shutdown that lasts less than one full week.

On the other hand, nothing prohibits you from requiring employees, including exempt ones, to use accrued vacation time or other time off to cover the missed work.

The FLSA doesn't require you to provide vacation or leave time at all, so there's nothing to prevent you from giving your employees vacation or PTO but then requiring them to take it on certain days (for example, during a standard facility shutdown period, which many companies have during the late December holidays).

A private-sector employer may therefore deduct the period of absence due to bad weather from an employee's remaining vacation or leave time, whether the absence is a full day or a partial day, so long as you pay exempt employees their regular salaries for that time.

The practical problem, of course, is that when bad weather hits at year-end, many exempt employees may have little or no remaining vacation or leave time. Or they may have already scheduled to take off — and received approval to use — whatever vacation or leave time they have remaining.

Even if an exempt employee has no time off remaining, she still must be paid her regular salary when the organization is closed because of bad weather for less than a week. The DOL has made it clear that you must pay employees in those circumstances, even if you offer no vacation or PTO benefits at all and even if you provide those benefits but the employee has no remaining accrued leave available.

There's no legal prohibition against applying PTO to days missed because of a facility closure and canceling part or all of approved vacation time for exempt employees who have time remaining but have approved plans to use their PTO on other days. You should first consider the inevitable negative effect of that practice on employee morale, however.

Learn more about when you can make deductions to exempt employees pay and other wage and hour issues with the Wage and Hour Compliance Manual

What if an employer's business is open, but exempt employees don't show up?
When the office or facility is open for business and an exempt employee doesn't report to work because of bad weather conditions, he isn't considered "ready, willing and able" to work -- even if his unreadiness is due to conditions beyond his control. Therefore, the basic FLSA rule applies:

Exempt employees generally shouldn't have their pay reduced for partial-day absences but may be docked for full-day absences. So if an exempt employee fails to report to work because of inclement weather for an entire business day when you're open for business, he may be docked that day's pay. As a practical matter, many employers pay anyway or allow employees to use available vacation or PTO to cover the absence.

Nothing in the FLSA requires employers to follow either of those practices, however. According to a DOL opinion letter on the subject:

The Department of Labor considers an absence due to adverse weather conditions, such as when transportation difficulties experienced during a snow emergency cause an employee not to report to work for the day even though the employer is open for business, an absence for personal reasons. Such an absence does not constitute an absence due to sickness or disability.

Thus, an employer that remains open for business during a weather emergency may lawfully deduct one full-day's absence from the salary of an exempt employee who does not report for work for the day due to the adverse weather conditions.

Beware of partial-day absences, however, when an exempt employee arrives late because of weather-related commuting problems (including a late arrival due to the need to make alternate child-care arrangements because of a school closing) or decides to leave early because of weather-related concerns.

Under those circumstances, exempt employees must be paid a full regular day's pay, regardless of whether management agrees that the situation was serious enough to warrant the late arrival or early departure.

The DOL has said, "Deductions from salary for less than a full-day's absence are not permitted for such reasons under the regulations. If an exempt employee is absent for one-and-a-half days due to adverse weather conditions, the employer may deduct only for the one full-day absence and the employee must receive a full-day's pay for the partial day worked."

Uh-oh! What if we've made improper deductions?
First, review your policies and practices, and make sure you don't make any improper deductions going forward. Then consider reimbursing employees if you've made improper deductions.

Improper deductions from exempt employees' pay can cause them to be reclassified as non-exempt, which makes them eligible for overtime pay, including back pay for two or more years. The good news is that the DOL has held that "isolated or inadvertent deductions do not result in loss of the exemption if the employer reimburses the employees for the improper deductions."

The DOL has gone on to say that "if an employer has a clearly communicated policy prohibiting improper deductions that includes a complaint mechanism, reimburses employees for any improper deductions and makes a good faith commitment to comply in the future, the employer will not lose the exemption unless it willfully violates the policy by continuing to make improper deductions after receiving employee complaints."

Review your personnel policies to ensure they include that "safe harbor" language to protect against employee reclassification based on honest oversights in applying FLSA provisions.

HR Hero Line article: Payroll deductions that don't affect exempt status

What about non-exempt, hourly employees?
It's up to your organization to decide whether to pay non-exempt employees for snow days because the FLSA doesn't require you to pay them for hours they would have worked if severe weather conditions hadn't caused an office or facility closure or created other problems that led to an absence from work.

As with exempt employees, you may allow or require non-exempt employees to use vacation or PTO to cover the absence, but that isn't a requirement.

Employer's plan of action
Review your policies and practices so all of your employees understand how absences due to bad weather will be handled from a payroll and attendance-tracking standpoint. While you're reviewing your policies, consider whether they adequately address the following issues:

• how office or facility closures will be communicated and who decides whether to close or remain open;
• whether employees who are able to report to work but have children whose schools or daycare facilities are closed may bring their children to work;
• whether employees who are unable to report to work for weather-related reasons are permitted to work from home and what conditions apply (e.g., remaining available via computer or telephone);
• how eligibility for pay will be determined if you choose to pay employees who are unable to report to work because of bad weather conditions, even when the office is open for business and the law doesn't require you to pay them (for example, some employers will pay employees if their regular commute would involve travel through a county where a snow emergency was declared or over roads that were closed by local law enforcement authorities); and
• whether non-exempt employees who miss work because of weather conditions and aren't eligible to be paid may make up some or all of the time missed within the same workweek.

Evaluate your employment policies and practices with the Employment Practices Self-Audit Workbook

Bottom line
Bad weather creates uncertainty and stress for both employers and workers. With proper planning, emploeyrs can reduce some of that stress by having clearly written and communicated guidelines for how your organization will handle any weather-related absences.

Get your plan in place, and when Jack Frost hits, you'll be well prepared and ready to enjoy the snowy landscape.

Return to the Jan. 23, 2009 issue of HR Hero Line e-zine for more tips and articles

Copyright 2007 M. Lee Smith Publishers LLC. This article is an excerpt from INDIANA EMPLOYMENT LAW LETTER.INDIANA EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems, but rather to provide information about current developments in Indiana employment law. Questions about individual problems should be addressed to the employment law attorney of your choice.

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