Wage and Hour Guidance for Employers Hit by Natural Disaster


By: Melissa M. Whitehead
When faced with a natural disaster, such as hurricanes and wild fires, there is so much to worry about – and the primary focus should always be on safety. However, in the immediate aftermath of natural disasters, employers often find themselves in uncharted waters. Because these are unique situations that most employers either never face or rarely face, even the most seasoned employers/HR departments may find themselves unsure of which employees need to be paid, and how much, for time in which the worksite was closed due to natural disasters. This can be an issue facing not only those employees most directly impacted by a natural disaster, but also those who work in branch worksites for companies headquartered in an impacted location. Below is a brief refresher on some of the most commonly asked questions:
Do we have to pay employees for the time our worksite was closed?
Under the Fair Labor Standards Act (FLSA), nonexempt employees need only be paid for hours actually worked, and do not need to be paid for time in which the worksite/company was closed due to a natural disaster. Employers can either treat these as unpaid days or allow employees to use any accrued vacation/PTO leave.
Whether exempt employees need be paid will depend on how long the worksite was closed. Exempt employees must be paid a full week’s salary for any week in which they worked any hours. So, exempt employees must be paid their full salary if the worksite is closed for less than one workweek. Employers can, however, require exempt employees to use any accrued PTO/vacation pay for those days, so long as employees have been given appropriate notice of that policy (typically, such a policy must be in the handbook or introduced to employees well in advance of implementation).
It is also increasingly common for employees to be able to work remotely. If employees are working remotely during the worksite closure, nonexempt employees must track their time (including meal breaks as necessary) and be paid for time worked, and exempt employees must be paid their full salary for any week in which they worked.
Our worksite stayed open, but some employees couldn’t make it into work – do we have to pay them?
Federal law treats such an absence as one for personal reasons if the business remains open for business. Employees (both exempt and nonexempt) can thus be temporarily placed on an unpaid leave of absence or required to use accrued vacation/PTO time. Employers should always be cautious in deducting exempt employees’ salaries, though, and it may be advisable to instead have those employees make up the missed time (this is not permissible for nonexempt employees, who need always be paid overtime if they work more than 8 hours in a day or 40 hours in a week).
Do we pay employees for the time we had our employees wait on site for power to be restored?
Yes. If employees were required to wait on-site, they must be paid for that time.
We let employees go home, but told them to be available for when power was restored and we would call them back to work. Do we pay them for their on-call time?
States have differing requirements for on-call/standby pay. Generally, whether or not you have to pay a nonexempt employee for this time will depend on how much the employer restricted/controlled the employee’s time away from the worksite. The more the employee is controlled/restricted, the more likely the employer is required to pay that employee for time spent on-call. And always remember that exempt employees must be paid full salary for any week in which they worked.
Keep in mind that these are general guidelines under the FLSA, but states may differ in their wage and hour obligations when natural disasters hit – and the statutes/regulations which are most protective of employees’ rights will apply. These guidelines also may not apply where a collective bargaining agreement governs. Again, employers’ first priority during natural disaster should be the health and safety of their employees. In the aftermath, employers are advised to seek the assistance of experienced labor and employment counsel to make sure all employees are properly compensated for their time.
If you have any questions or would like more information, please contact Melissa M. Whitehead at [email protected] or (916) 472-3306.