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Natural Disasters and Companies' Responsibilities

Q. During the recent power outage, we paid employees their full salary even though we were closed. What obligations does an employer have to employees during these situations?

A. Most compensation questions get answered by starting with determining whether an employee is exempt or non-exempt. Exempt employees, often referred to as "salaried", are considered exempt from overtime laws; non-exempt employees, often called "hourly", are not exempt from rules concerning the number of hours to be worked and eligibility for overtime.

I consulted with employment attorney David Conforto: “When inclement weather forces a business to close, under federal law, an employer is generally not required to pay non-exempt employees. An issue arises, however, where a non-exempt employee has not received notification that the business is closed and reports to work. In this scenario, Massachusetts law requires employers to pay the non-exempt employee for at least three hours at no less than the basic minimum wage, assuming she or he was scheduled to work at least three hours on that day. This rule does not apply to organizations granted status as charitable organizations under the Internal Revenue Code.

There is a different set of requirements for exempt employees. If inclement weather shuts down business operations for less than a full workweek, the employer must pay an exempt employee the full salary, assuming she or he is ready, willing and able to work. Failing to abide by this requirement may jeopardize the exemption and entitle the employee to be paid overtime. The employer is not, however, required to pay an exempt employee where business operations are shut down for a full workweek or more”.

Communication is the key. Have a phone hotline available for employees to call, in addition to an email or website notification which may not be available based on the weather. If employees can work from another location, or remotely, provide that information as well. Employers should communicate about the expectations they have and employees can discuss the extent of their capabilities based on their circumstances.

In these circumstances, some employers have provided full pay, some had employees use vacation, PTO, or personal days.

We may not see power out again soon, but employers and employees need to be prepared for the seasonal impact ahead.

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