Hurricane Harvey is relentlessly drenching southeast Texas and the surrounding areas, resulting in unprecedented flooding and damage. As the storm rages, many employers are wondering how to respond and what happens next. After the waters and dangers subside-and even as they continue to process the personal toll inflicted by the storm-affected employers will face a host of legal and practical issues. This article summarizes some of the primary questions that may arise in the near term.
Wage and Hour Issues
There are several payroll-related concerns that can be triggered by an emergency situation. We start with a refresher on who must get paid when operations are shuttered due to weather.1
Non-Exempt Employees. Under the FLSA, as well as Texas law, non-exempt workers must be paid only for the time they work. As a result, employers need not compensate non-exempt employees who are not working because of a storm. Notably, it does not matter whether the absence is based on the employer's decision to close a worksite or the employee's decision to stay home (or evacuate). If the worksite is open, but the employee decides to stay home or to leave a shift early, the non-exempt employee does not need to be paid for the hours missed.
There may be exceptions during a weather event for waiting time, or on-call time. The FLSA considers employees to be "on call" if they must remain on the employer's premises and are unable to use their time for their own purposes.2 Thus, for example, employees who are required to remain at a location that has lost power in case power returns should be paid for the time spent holding down the fort despite their inactivity.
Exempt Employees. When an employer shuts down its operations because of adverse weather conditions for less than a full workweek, exempt employees must be paid their full salary.3 This rule also applies if exempt employees work only part of a day. Thus, if an employer decides to send staff home early due to deteriorating conditions, it may not dock exempt employees' pay. Indeed, if an employer deducts from the employee's salary in this situation, it risks losing the exemption applicable to that employee.
Nonetheless, and barring any state law or overly restrictive company policy to the contrary, exempt employees may be required to use accrued leave or vacation time (in full or partial days) for their absences. While it might not be a popular move, an employer can direct exempt employees to take paid time off for the closure, pursuant to the employer's bona fide leave or vacation policy. If, on the other hand, an employee does not earn or does not have any available leave time, the employee is entitled to his or her full guaranteed salary if the employer decides to close due to weather.4
If an employer is open for business, on the other hand, an exempt employee who elects to stay home due to the weather situation is considered absent for personal reasons. In lieu of paying salary, an employer with a bona fide leave or vacation policy may require the employee to use his or her accrued paid time off to cover the absence. As long as it is permitted by state law, leave time in this circumstance may be taken in full or partial days.
If an employer has a leave policy, but the absent employee does not have a leave account balance, the employer is not obligated to pay the employee. The employer can place the employee on unpaid leave for the full day(s) that he or she failed to report to work for personal reasons. Employers should bear in mind that salary deductions for less than a full day's absence are not permitted, even though leave balance deductions are allowed for partial-day absences. As a result, if an exempt employee with no leave balance misses half a day, the employer must pay that employee his or her salary for the entire day, with no partial deduction for the absence. Meanwhile, an employee with a leave balance in the same scenario could be required to use half a day of paid time off to cover the absence.
Remote Work. Employers should consider how to address situations where employees work from home due to Harvey, whether as a long-term or short-term solution. As noted earlier, non-exempt employees must be compensated for all time spent working. Accordingly, employers must pay non-exempt employees for performing any work remotely, even if the employee did not have express permission to work from home. Employers, moreover, may need to rely on employee self-reporting of hours worked in such a scenario. To help minimize the risk of wage and hour violations for employees who are working from home, employers must implement, communicate and strictly enforce a time and attendance policy that clearly explains what constitutes compensable time and requires employees to accurately record all time worked.
Exempt employees, too, must be paid their regular salary in this circumstance. Even if an exempt employee spends only a few minutes working remotely, he or she must be paid the usual salary for the day and the workweek. In instances where a partial day is worked, the exempt employee can be directed to use appropriate leave time for the balance of the time, as discussed above.
Delay in Wage Payments? One possible consequence of a natural disaster like Harvey is the delayed processing of employees' wage payments. Texas law generally requires payment of wages twice a month for non-exempt employees and at least once a month for FLSA-exempt employees.5 Louisiana law requires payment of wages no less than twice a month for employees who...