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Wage and Hour Issues: Proper Pay Practices During Disasters

By: Angelita Chavez | September 18, 2017

By: Rohini Vora

Catastrophic events often bring reminder of pay and benefits issues that an employer should take into consideration.  Although it is practically impossible to be fully prepared for any disaster, it is important for employers to be aware of employment laws that may be implicated in such situations. It is eminent for employers to have a policy and procedure in place (and communicated to employees) in the event of a disaster.

Emergency office closures and mass employee absences caused by disasters such as hurricane, earthquake, flood, fire, epidemic flu outbreaks, or other emergencies, require employers to address difficult issues involving proper pay procedures and granting employee leave where warranted. For example: what is the employer’s obligation to pay their employees regular wages, during disasters, given the following circumstances:

  • When the office is closed and employees can’t come to work?
  • If some employees are asked to work during the crisis, either from home or at another location?

Employers might assume that their obligations change if a state of emergency is formally declared; however, that assumption is mistaken. Overall, employer’s duties do not change if the government announces a state of emergency.

Employers must consider various issues in continuing to comply with their obligations under the Federal Fair Labor Standards Act of 1938 (FLSA), as well as applicable state laws regarding wage and hour, disability and leave. The Wage and Hour Division (WHD) of the U.S. Department of Labor enforces a variety of worker protection laws, including the FLSA, the Family and Medical Leave Act (FMLA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). The FLSA is the federal law of most general application concerning wages and hours of work.

Exempt versus Non-exempt Employees

An employer must differentiate between exempt and non-exempt employees when determining their legal obligations to compensate employees for absences during a disaster.

Non-Exempt Employees

Generally, the FLSA requires employers to pay non-exempt employees no less than the federal minimum wage for each hour actually worked and overtime at one and one-half times an employee’s regular rate of pay for all hours actually worked in excess of 40 in a week. These requirements are not subject to waiver during natural disasters and recovery efforts. Therefore, an employer is not legally obligated to pay nonexempt employees if the employer is unable to provide work to those employees due to a natural disaster, illness or an office closure.

An exception to this general rule exists where there are employees who receive fixed salaries for fluctuating workweeks. These are nonexempt employees who have agreed to work an unspecified number of hours for a specified salary. An employer must pay these employees their full weekly salary for any week in which any work was performed.

Nonexempt employees who work partial hours or assist during a disaster should be compensated for all hours worked, including for time spent being on call. As an illustration, this would include clean-up performed by an employee, as the clean-up is work done for the benefit of the employer.

Employers should also check state wage and hour laws concerning minimum number of hours that must be paid when a nonexempt employee is on-call or appears for work for all or part of a day.

Exempt Employees

Exempt employees, however, are paid on a salary basis regardless of the number of hours they work. An employer’s ability to deduct an exempt employee’s pay for missed work is limited. An employer will be required to pay the employee's full salary if the worksite is closed or unable to reopen due to inclement weather or other disasters for less than a full workweek. However, an employer may require exempt employees to use allowed leave for this time.

If an exempt employee chooses to stay home because of weather emergencies, but the employer is open for business, then the U.S. Department of Labor (DOL) considers such absence as an absence for personal reasons. Under this circumstance, an employer may place an exempt employee on leave without pay (or require the employee to use accrued vacation time) for the full day that he or she fails to report to work.

However, a deduction from salary for less than a full-day's absence is not permitted, although the employer may make a partial day time deduction from the employee's leave bank (if there is insufficient time in the leave bank, no deduction from salary can be made).

Caution is recommended, however, in docking a salaried employees' pay. Moreover, many employers instead require employees to "make up" lost time after they return to work, which is permissible for exempt employees. This practice is not allowed for nonexempt employees, who must be paid overtime for all hours worked over 40 in a work week.

Remote Work

Where necessary, employers may consider modifications to the work schedule by asking employees to work from home, if the nature of the work permits, whether as a long term or short-term solution. In situations where employer modifies the work schedule, Employers should consider clearly the timekeeping requirements.

Disability and Leave Laws

Family and Medical Leave Act. Employees affected by disasters may be entitled to leave under the Family and Medical Leave Act of 1993 (FMLA). Employees affected by a natural disaster are entitled to leave under the FMLA for a serious health condition caused by the disaster. Additionally, employees affected by a natural disaster who must care for a child, spouse, or parent with a serious health condition may also be entitled to leave under the FMLA.

Americans with Disabilities Act of 1990. Additionally, employees who are injured due to a disaster may be protected under the Americans with Disabilities Act of 1990 (ADA) and corresponding state law. Under the ADA, employees who are physically or emotionally injured as the result of a catastrophe may be entitled to reasonable accommodation by the employer as long as it would not place undue hardship on the operation of the employer's business.

Federal relief

Although many workers will be covered by the state's regular unemployment compensation program, those not covered may apply for Disaster Unemployment Assistance (DUA). DUA is a federally funded program that assists individuals who become unemployed as a direct result of a declared disaster.

This article is prepared and published for informational purposes only and is not offered, or should be construed, as legal advice.

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