Employers all over the east coast are anticipating closing tomorrow due to snow. Many are asking whether they must pay their employees if they do decide to close.
The key questions to ask in deciding whether you must pay employees on a day you close your business are: (1) is the employee exempt or non exempt; and (2) is the employer open all or part of the day?
Employers must pay all exempt employees for the day if the employer chooses to close. If the employer remains open but the employee does not report to work, the employer is not required to pay the employee for that day. However, if the employee performs any work that day, s/he must be paid. Therefore, if the employee reports to work but the employer closes early, the employee chooses to leave early, or the employee stays home but takes a call or checks his/her e-mail, the employee must be paid.
Employers who have a well drafted vacation or paid time off (“PTO”) policy, can require exempt employees who take a partial or full day off to use available vacation or PTO to be paid for that day. However, if the employee has no available vacation or PTO, the employer must still pay exempt employees as described above.
The situation is different for non-exempt employees. An employer who closes for an emergency is not required to pay non-exempt employees for that day. Employers must only pay a non-exempt employee who reports to work and is sent home the amount required by state law. However, most states only require payment at the state minimum wage. In Massachusetts, employees who report to work but are sent home must be paid at least the state minimum wage for three hours, in New Hampshire for two hours, and in New York for four hours. Other states may have different or no requirements.
If possible, employers should decide if they will be open. If not, they should inform employees as soon as possible that they will be closed to avoid having to pay employees who report to work. For the future, employers should develop an Emergency Closure Policy and address in their Employee Handbook.
Please do not hesitate to contact us if you have any questions about your obligations or need to update your Employee Handbook.