The Weather Outside it Frightful…Is Docking Pay From No-Shows Rightful?

Winter has finally arrived in Minnesota so blizzards, traffic jams and absenteeism can’t be too far behind.  This can present a dizzying jumble of obligations regarding employees’ entitlement to be paid.

Therefore, this is probably a good time to review the rules under the Fair Labor Standards Act (FLSA) for those times when the weather prevents an employee from getting to work or causes the employer to close the business for the day.

Non-Exempt Employees

This is the easy part since the FLSA generally does not require that non-exempt employees be paid if they do not actually perform any work.  As such, if the company is open but an employee is unable to come in, that employee need not be paid.  Moreover, if the company is closed and tells employees to stay home, non-exempt employees need not be paid, even if they miss or disregard the notice about the closure and brave the elements to come in.  There is no federal or Minnesota law that mandates “reporting pay” or “show-up pay.”

On those days where the business is open but employees are late due to traffic, blocked roads, etc., pay is owed only for the actual hours worked.  Similarly, if the business closes early because of worsening conditions, non-exempt employees need only be paid for time that they worked.  If some employees are unable to leave when the business closes early because their transportation is not yet available, they are not entitled to additional pay for remaining at the work site unless the employer requires or permits them to keep working.

However, even though not legally required, many employers who send employees home early for weather-related reasons elect to pay those employees for the remaining hours of the work day.

In some cases, employees make it to work and find that while the business is open, they can’t get started because, for example, a power failure makes their computers or assembly lines inoperable, or a sufficient number of co-workers have not yet arrived.  If these employees are required to wait around until repairs are made or enough employees show up, they must be paid for the waiting time.  Under the FLSA regulations, employees in these circumstances are considered ready to work and “waiting to be engaged” so they are entitled to be paid.

A great many employers have policies governing weather-related absences and those policies of course should be followed.  For example, some such policies guarantee a minimum amount of pay (e.g. four hours) for any employee who reports for work and is then sent home due to weather-related closure.  As noted below, a detailed policy addressing bad weather contingencies is advisable.

Exempt Employees – Business is Open

The rules regarding exempt employees are a bit more complex primarily because of the requirement for payment on a salary basis.

If the business is open but an exempt employee arrives two hours late, that employee must nevertheless be paid their entire salary for the day.  Payment on a salary basis requires that employees be paid their predetermined compensation regardless of the quality or quantity of work performed.  Docking an employee for two hours of tardiness would be inconsistent with this requirement.  The same is true if the employer decides to send all employees home early – the exempt employee must be paid for the entire day.

On the other hand, it is permissible in these circumstances to require that the two missed hours be paid for out of the employee’s vacation or paid time off (PTO) account.  The FLSA does not mandate or regulate vacation or other time off benefits, so as long as the employee receives the actual amount of money to which they are guaranteed under their salary agreement, the salary principle of the FLSA is satisfied.

Employees sometimes complain that they are being treated as if they are hourly (and therefore non-exempt) when vacation or PTO is deducted from their accounts in this fashion but this is not a valid protest – the FLSA is quite clear that as long as the right number of dollars end up in the employee’s pocket, it makes no difference where those dollars came from.

Where the business is open but the exempt employee misses the entire day, the employer may deduct a day’s pay (i.e. one-fifth of the weekly salary).  The FLSA sets out various exceptions to the requirement that salaried employees always receive their guaranteed pay, and one of those exceptions is “absences of a full day or more for personal reasons.”  Some might argue that missing work due to weather conditions is beyond the employee’s control and therefore not a “personal reason.”  However, the FLSA provides that “personal reasons” are those that are not caused by or attributable to the employer’s actions or operating requirements, and employers simply can not be blamed (or credited) for the weather.

Of course, an employer is not compelled to dock the exempt employee’s salary for a missed day.  Instead, they could give exempt employees the option of either taking the day unpaid or using a vacation or PTO day, or they could even compel employees to use of vacation/PTO if that is deemed desirable.  Again, since vacation and PTO are not regulated by the FLSA, the employer may apply those benefits as they wish, although they should make sure that they comply with their policy in this area if they have one.

Exempt Employees – Business is Closed

If the business is closed because of the weather, an exempt employee must be paid for the day because it is an absence attributable to the employer, not one for personal reasons.  Again, it could be argued that the employer is not responsible for the weather so they should not have to be accountable for it.  However, the FLSA plainly provides that if exempt employees are ready and able to work but are told by the employer not to do so, they must be paid in order to preserve their salaried status.

Under these circumstances, it again would be permissible for the employer to require that the day be taken as a vacation or PTO day and to debit the employees’ balances accordingly.  However, if an exempt employee has no remaining time off benefits in their account, they must nevertheless be paid their guaranteed salary for the day.  In that case, employers frequently permit the employee to maintain a “negative vacation balance”, which means that future vacation accruals will not be available until the employee’s balance moves back up to zero.

Bottom Line

The business is open, the business is closed.  The employee is exempt, the employee is non-exempt.  The employee has PTO available, the employee has no PTO.  There are many permutations to all of this, and the one constant is that no matter what the employer decides, some employees are going to complain.

The best advice in this area is to implement and publicize a carefully-crafted policy that addresses all of the different scenarios.  That way, employees will know in advance what will happen if a significant weather event arises and they can evaluate their options accordingly.  They probably will still complain but at least your responses to bad weather won’t be a surprise.