By Eleanor Lipsky, Esq.
With the region experiencing a seemingly unusual number of winter storms and polar vortexes this season, employers should review their policies on paying employees for weather-related absences, while considering potential liability for injuries when determining closures.
Employers might be required to pay employees who miss work because of bad weather under the federal Fair Labor Standards Act (“FLSA”). In particular, the FLSA requires employers to pay exempt employees (generally, those exempt from overtime pay) their regular salaries for any business closure lasting less than one week. An exempt employee’s pay cannot be deducted based on the quantity or quality of work during such closures.
For exempt employees, this means that if the employee is sent home because of inclement weather, the employer is still required to pay for the entire day. On the other hand, if the business remains open but some exempt employees cannot commute to work, the employer can deduct an exempt employee’s salary for a full day’s absence without jeopardizing the employee’s exempt status. However, employers cannot deduct salary for less than a full day’s absence without jeopardizing the exempt status. This means that if exempt employees arrive late because of commuting issues or leave early because of an imminent storm, regardless of the employer’s opinion on the weather, they must still be paid for a full day’s pay.
A private employer has the option to deduct the period of absence from an exempt employee’s paid time off, as long as the employee still receives his or her full salary for the time the business is closed. However, if the exempt employee does not have enough paid leave to cover the absence, the employer may not deduct the difference from the exempt employee’s salary. This can become an issue at the end of the year in particular. Businesses can create policies for their handbooks, such as requiring exempt employees to deduct future leave to cover missed hours or perhaps choosing to advance the employee leave and not deduct the hours from their paid leave bank. Employers should be careful to consider any negative effects a certain policy might have on worker morale.
For non-exempt, or hourly, employees, the FLSA generally does not require employers to pay for any time that actual work is not performed. This means that payment is not required if the employee did not come to work or the business is closed because of weather, even if the employee was scheduled to work a full day and was sent home early. It is important to note that this rule applies to non-exempt employees, unless they are paid on a fluctuating workweek basis. Employees paid on such a basis must still be paid their full weekly salary for any week during which any work is performed, regardless of work missed because of weather.
In contrast to the above regarding FLSA rules for non-exempt employees, some states, including New Jersey and New York, have their own reporting pay requirements. Such statutes require employers to pay a minimum amount to employees who show up for work, even if they did not perform any work. New Jersey’s law, outlined in N.J.A.C. 12:56-5.5, requires that any “employee who by request of the employer reports for duty on any day shall be paid for at least one hour at the applicable wage rate,” unless the employer “has made available to the employee the minimum number of hours of work agreed upon … prior to the commencement of work on the day involved.” Employers with offices in multiple states should ensure they are familiar with each state’s laws regarding reporting pay.
Further, employers should also keep in mind that collective bargaining agreements may also require employers to pay employees for a minimum number of work hours, regardless of the number of hours actually worked.
Finally, employers who choose to keep their business open in inclement weather should consider their potential liability. Normally, employees who are injured on the job in the scope of their employment are limited to workers’ compensation claims as their exclusive remedy under N.J.S.A. 34:15-8. However, there is an exception to this provision in instances of “intentional wrong” by the employer. This means that an employee may be able to sue if the employer’s intentional conduct causes the employee’s injury. While “intentional wrong” has been narrowly construed by New Jersey Courts, employers should nevertheless keep this in mind, particularly, if their business requires employees to work outside in poor weather conditions.