What are the pay rules when we have to close because of an emergency? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
  • LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

What are the pay rules when we have to close because of an emergency?

Get PDF file

by on
in Compensation and Benefits,Human Resources

Q. Our offices were closed due to a phoned-in bomb threat. As a result, we were forced to send home all our employees. Do we need to pay employees for showing up to work that day?

A. That depends on a number of factors. Are the em­­ployees exempt or nonexempt under the Fair Labor Standards Act? How long were the offices closed? Had the employees already reported to work?

If an employer notifies nonexempt employees not to report to work in advance, they are not required to pay them for hours they did not work.

However, if a nonexempt employee reports to work and is sent home, the state reporting pay requirements may apply. Specifically, California wage orders require nonexempt employees to be paid if they report to work and are either not put to work or are provided less than half their usual or scheduled day’s work.

Employers must pay these employees the greater of either (1) half their usual or scheduled day’s work (up to four hours) or (2) two hours at their regular rate of pay.

This rule applies when the employer chooses to close its facilities.

Several exceptions apply when the events that cause the business closure are outside the employer’s control, such as:

  • Business closures due to threats to employees or property, or at the recommendation of civil authorities
  • Failure of the sewer system or public utilities
  • Work interruption caused by an act of God or other cause outside of the employer’s control.

In those situations, nonexempt employees would not be entitled to payment even if they reported to work.

The rules are different for exempt employees. Em­­ployers must pay exempt employees their full salaries for any week in which they perform work (excluding the first and last weeks of their employment).

Deductions may not be made from an exempt ­­employees’ compensation for absences occasioned by the em­­ployer or the operating requirements of its business if the em­­ployee is ready, willing and able to work. Any such deduction threatens employees’ exempt status.

However, if the shutdown lasts for a full workweek and the exempt employee does not perform any work in that week, the employee is not entitled to pay for that week.

Leave a Comment

Previous post:

Next post: