Employers should address two key questions with their inclement weather policy: How will you notify employees if the company will be open or closed? How will employees be paid if the company is closed all day, or for a partial day?
The method of payment for hourly employees when they miss work due to inclement weather is quite simple. If a non-exempt, hourly paid employee does not work, the company is under no obligation to pay the employee. This is true regardless if the company is open for business, or if it is closed due to the weather. The Fair Labor Standards Act says that you must pay non-exempt employees only for time “actually worked.” The same holds true when an hourly, non-exempt employee comes in late or leaves early due to the weather. You only have to pay for actual time worked.
For salaried exempt employees, the method of payment is more complicated. They are paid a set salary for “all hours worked.” Salaried exempt employees must be paid if they miss work due to weather, if the company is closed for business. (This can be done through paid time off.) The FLSA states: “An employee will not be considered to be on a salaried basis if deductions from his predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business.” If the business is closed for an entire workweek, and an employee performs no work, then the employer does not have to pay for that week. In today’s world of smart phones and remote log-ins, this is very rare.
If the business is open, and a salaried exempt employee does not report for work, and performs no work at home, then the company may require the employee to exhaust a day of paid vacation/sick/personal leave. In this case, if the employee has no available vacation/sick/personal leave, it is permissible to dock their pay for the day, because work was available, and the employee is in essence staying home for personal reasons. If the salaried employee reports for part of the day, they must be paid for the entire day. It is not permissible to dock a salaried exempt employee for a partial day absence.
For salaried non-exempt employees on the fluctuating workweek (who receive one-half time for overtime premiums), their pay cannot be docked unless they perform no work in the workweek, as well.
Companies should make their policies known to all employees in advance, and in writing. You should communicate your policy now to prepare for the next inclement weather situation. Keep in mind that companies should balance the legal requirements under the FLSA as compared to the “employee relations” issue of paying/not paying employees for inclement weather days.
The Employers Association