When Stormy Weather Closes Your Business, Do You Still Have to Pay Your Employees?

Employment Law

When Stormy Weather Closes Your Business, Do You Still Have to Pay Your Employees?

Jan 22, 2024 | Employment Law

For the first time in more than two years, the northern Virginia area was blanketed by a significant winter storm recently, with enough snow accumulation that many businesses made the decision to close for the day. Those office closures likely raised questions that many Virginia employers hadn’t thought about for a while: Do I have to pay my employees, if I decide to shut things down because of bad weather? And if I do have to pay them, can I require them to use available paid leave while the business is closed? Under the federal Fair Labor Standards Act (FLSA) and most state law wage-hour laws, including Virginia’s, the answers depend primarily on whether the employee is classified as nonexempt or exempt under the FLSA.

For nonexempt, hourly employees, the answer to the pay question is a straightforward no. The FLSA requires only that employers pay nonexempt employees for the time they actually work. So, when the business is closed for bad weather, or the employee does not report to work, the employee is not entitled to be paid for the day. Note that nonexempt employees must be paid for any remote work they do while the business is closed for inclement weather. As to the second question, neither the FLSA nor Virginia law prevents an employer from either requiring or voluntarily allowing nonexempt employees to utilize paid leave, if available, to cover wages lost due to a closure of the business. However, there is no legal compulsion for the employer to do so.

For exempt, salaried employees, on the other hand, the answer is more nuanced. To qualify as exempt from the FLSA’s minimum wage and overtime requirements, an employee must be paid on a salary basis, i.e., receive a predetermined amount of compensation for each workweek. That amount cannot be subject to reduction because of variations in the quantity of work the employee performs. Thus, as a rule, if an exempt employee performs any work during a workweek, the employee is entitled to be paid the full amount of his or her salary. If the employee is ready and willing to work, deductions from the employee’s salary may not be made for time when work is not available. That would include those weeks in which the employer’s business is closed for anything less than the full workweek due to inclement weather. Deductions are permitted from the pay of exempt employees in a handful of limited circumstances, including for an employee’s full day absences “for personal reasons, other than sickness or accident” (for example, to handle personal affairs), but only if the employer offers its employees vacation or paid time off for such absences.

With these distinctions in mind, let’s circle back to the question at hand:  During a week when there has been an office closure due to inclement weather, can a business require its exempt employees to take vacation or other paid leave without jeopardizing their FLSA exempt status? Yes, according to the U.S. Department of Labor. For those businesses that offer employees vacation or paid time off, it would be permissible for the employer to require an exempt employee to draw down the employee’s accrued leave balance for the time an employee is unable to work due to closure of the office, without affecting the employee’s exempt status. With the addition of paid leave, the employee still receives payment in full of the employee’s predetermined salary, thereby satisfying the FLSA’s salary basis requirement.

Full compensation for the workweek is generally the key to maintaining the employee’s FLSA exempt status. So, an employer still must pay the employee’s full salary in a week that the office is closed due to bad weather for less than a full workweek, if: (1) the employer does not offer employees vacation or paid time off; or (2) the employer does offer vacation or paid time off, but the employee (a) has no paid leave left to use; (b) the employee’s use of the accrued paid leave balance will result in a negative balance; or (c) the employee is already in a negative accrued paid leave situation. 

If you have questions about your workforce policies and practices to ensure compliance with the Fair Labor Standards Act, please contact Doug Taylor at (703) 525-4000 or rdougtaylor@beankinney.com, or your current Bean Kinney & Korman attorney.

This article is for informational purposes only and does not contain or convey legal advice. Consult a lawyer. Any views or opinions expressed herein are those of the authors and are not necessarily the views of any client.

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