The Employers’ Association – Human Resources Group

Legal Update – November 2011

By Peter J. Kok and Aliyya A. Clement

Miller Johnson

Snow Day? To Pay or Not to Pay, That is the Question.

With winter weather looming on the horizon, employee absences due to snow accumulation and icy roads are undoubtedly looming as well. When such situations arise, the question for an employer becomes, “Do I need to pay an employee who is absent due to bad weather?” The Fair Labor Standards Act (FLSA) and the U.S. Department of Labor (DOL) have articulated the minimum requirements for employers in these situations, and now is the perfect time of year for employers to review these standards and update their inclement weather policies. Importantly, the answer varies depending on whether the employee is exempt or nonexempt under the FLSA, and employers should be aware that this determinationis particularly important in the case of an exempt employee because of the possibility that the employee could lose his or her exempt status.

An employer’s determination as to whether it must pay an employee despite his or her absence due to bad weather conditions starts with an inquiry into whether the employee is “exempt” or “nonexempt”under the FLSA. The general rule is that an employee is not exempt; however, if the employee meets certain criteria, he or she may be exempt from overtime pay requirements. The most common exemptions are the “bona fide executive, administrative or professional” exemptions, which provide that the employee is exempt if he or she meets the duty, salary level, and salary basis tests required.

If the employee is nonexempt, the answer to our snowday pay question is fairly straightforward: If weather prohibits them from coming to work, you are not required to pay them. This is true whether the employer’s place of business is closed due to inclement weather or not, because the law requires that you pay a nonexempt employeeonly for “actual” hours worked. As noted above, however, this is only the minimum required by the FLSA, and employers may choose to have policies which allow these nonexempt employees to use paid time off in the event of an absence due to bad weather.

The question is more complicated when dealing with an exempt employee because of the “salary basis” requirement referred to above. Importantly, if an employer improperly makes deductions from an exempt employee’s pay, it is possible that the employee will no longer be considered “exempt” and become subject to the overtime provisions of the FLSA.

The executive, administrative, or professional exemptions discussed above mandate that an employee be paid on a salary basis. An employee will be considered to be paid on a salary basis if the employee “regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of his compensation, which amount is not subject to reductions because of variations in the quality or quantity of the work performed.” 29 C.F.R. §541.602(a). Thus, an employer is generally prohibited from making deductions from an exempt employee’s pay based on quantity of work.

The FLSA does, however, contain limited exceptions to the general salary basis rule prohibiting deductions from pay. Deductions may be made when an exempt employee is absent from work for one or more full days for personal reasons, other than sickness or accident. Thus, if an employee is absent for one or more full days to handle personal affairs, a deduction may be made from the employee’s pay without the employee’s salaried status being affected. However, if the employee is “ready, willing and able to work, deductions may not be made for time when work is not available.”

The DOL has made clear that if the employer’s place of business remains open despite bad weather conditions and an exempt employee chooses to be absent from work due to those weather conditions, the absence may simply be treated as an absence for “personal reasons.” This means that the employer may deduct a full day of pay from the employee’s salary. An employer may also require an exempt employee who fails to report to work to take vacation or make leave bank deductions without jeopardizing the employee’s exempt status. Further, as long as the office is open, an exempt employee who has no accrued benefits in his or her leave bank account does not have to be paid.

Importantly, deductions from salary for less than a full day’s absence are not permitted under the FLSA Regulations. Therefore, when the employee’s absence is for less than a full day, payment of an amount equal to the employee’s guaranteed salary must be made even if the employee has no accrued vacation or other leave benefits.

If an employer chooses to close its place of business due to bad weather conditions, the exempt employee’s absence will be considered to be an absence “occasioned by the employer or by the operating requirements of the business.” Thus, if the employer closes operations due to a weather-related emergency or other disaster for less than a full workweek, the employer must pay an exempt employee “the full salary for any week in which the employee performs any work without regard to the number of days or hours worked,” because “deductions may not be made for time when work is not available.”

In sum, the determination as to whether an employer must pay an employee for an absence occasioned by bad weather conditions revolves around two factors:

(1)Is the employee exempt or nonexempt under the FLSA?

(2)Is the employer’s place of business open or has it been closed due to inclement weather?

While a nonexempt employee need not be paid for weather-related absences, the determination as to whether an exempt employee must be paid is slightly more complicated, and an employer’s incorrect determination could result in the employee losing his or her exempt status. Employers will want to make sure that they review their inclement weather policies as winter weather approaches to ensure that they are in line with the requirements of the FLSA. Further, while the FLSA provides the minimum standards for payment of employees in the event of bad weather, employers should remember that they may have more generous policies if they so choose.

If you have any questions regarding this article or other matters, please contact theauthors for more information: Peter J. Kok (616) 831-1724; or Aliyya A. Clement (616) 831-1712; .

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