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Employer Wage Payment Obligations in the Wake of Hurricane Sandy

Hurricane Sandy has passed but her wake is still overwhelming for many. Once employers know their families are safe, they turn back to their businesses, many of which are struggling to maintain day-to-day operations. In the midst of all this, employers should be aware of the myriad of wage payment issues that may arise.

 1) Wage Payment Issues for Exempt Employees:

a. Under the federal Fair Labor Standards Act (“FLSA”), if an employer closes the office due to inclement weather or some other disaster, and that closure lasts less than a week, the employer must pay exempt employees full salaries even if

i. the employer does not have a bona fide (time off) benefits plan;

ii. the employee has no accrued time off benefits;

iii. the employee has limited accrued time off benefits and reducing that accrued time will result in a negative balance; or

iv. the employee already has a negative leave balance.

A private employer can direct exempt staff to take vacation or debit their leave balance in a situation where the office is closed, for either a full or partial day, as long as the employees receive in payment an amount equal to their guaranteed salary. If an employer closes the office for a full week, and the exempt employee does not do any work – whatsoever – the employer has no obligation to pay the employee for that week. It is important to be aware of whether the employee worked from home or from elsewhere, such as through the Internet.

b. Also under the FLSA, if an employer’s office is open and an exempt employee does not report to work due to inclement weather, deductions from the employee’s leave bank or salary can be made. If an exempt employee has no accrued benefits in the leave bank account, that employee does not have to be paid for the full day(s) she/he fails to report to work. Again, it is important to be aware of whether the employee worked from home or from elsewhere.

 2) Wage Payment Issues for Non-Exempt Employees: There is generally no obligation to pay non-exempt employees for time not worked. One exception is where an employee is paid a fixed salary for a fluctuating workweek. Also, some state laws contain call-in/reporting statutes that require employers to pay non-exempt employees if they report to work and are denied work, especially where they were never advised that they should not report to work. New Jersey, Connecticut and New York are a few states that have such laws.

 3) Other Wage Payment Issues:

a. “Waiting time” for the power to restart is compensable.

b. An employer may be required to pay an employee for “on-call” time. For example, asking a maintenance person to remain on premises during a storm, even if the employee does no work, is compensable.

c. “Volunteering” may be offered by the real “team players” but their time is usually compensable.

 4) WARN Issues: If a place of employment is permanently damaged and will not reopen, the federal Worker Adjustment and Retraining Notification (“WARN”) Act and any state WARN Act may apply.

 5) Leave Issues: If employees are out on leave at the time a disaster strikes or request leave at that time, such as leave under the Family and Medical Leave Act, the days the business is closed will not count against the employees’ leave entitlement.

Employers should determine their obligations under federal and state laws well in advance so they are prepared when a natural disaster strikes. If the disaster has already struck, seek counsel to be sure you are not adding to your storm-related problems. Best of luck and be safe.

Brody and Associates regularly advises management on complying with state and federal employment laws including wage and hour laws. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.965.0560.