In times of unexpected facility closures due to events such as inclement weather, what is the responsibility of the staffing provider with regard to the workers’ pay? Whether a worker must be paid if a client company is closed depends on the employee’s exempt or nonexempt status.
Exempt. The Fair Labor Standards Act requires employers to pay exempt employees their regular salary for any shutdown that lasts less than one week. However, employers and staffing firms alike can require employees to use accrued vacation or paid time off to cover the missed work days.
If an exempt employee does not have enough accrued paid time off to cover all closure days, the difference cannot be deducted from the worker’s pay. In a situation where a client company or business remains open, but an exempt employee is unable to get to work because of the weather, the co-employer responsible for payroll may deduct a full day’s pay. However, no deductions can be made if the exempt employee does any work that day, including working from home.
Non-exempt. Employers generally are not required to pay non-exempt employees for days that the employee does not perform any actual work, including for days when the business is closed because of a weather event. There are sometimes exceptions to this rule in collective bargaining agreements, company policies, or under the FLSA if an employer utilizes the fluctuating workweek method. As with exempt employees, firms may allow or require non-exempt employees to use vacation or PTO to cover the absence.
There are other situations staffing firms must be aware of as well.
Report-in. Certain states require employers to pay a minimum amount to employees who show up for work even if they perform no work. This can be a concern when employees report to work, for instance because they were unaware of the closure or because the business closure went into effect after their arrival.
On call. If the client company requires the employee to be on call while the office is closed due to a weather emergency and the employee cannot effectively use the time for his or her own purposes, the employee must be paid for the on-call time. Employers are not required to pay employees who are at home and available to the employer but are able to use the time for their own purposes.
Stranded employees. Exempt employees must be paid regular salary, even if stranded and unable to work for days. Payment to non-exempt employees is only required for hours worked, even if they are stranded at the job site.
Volunteering. Employees who “volunteer” to assist their employer during an emergency are not “volunteers” if the work they perform is within the scope of their regular job duties. Thus, staffing firms should be cautious when determining pay for employees who volunteer to work.
Remote working. Employees are entitled to compensation for time spent working even if the employee did not have express permission to work from home. The key is to have clear policies, including how to track hours worked, to avoid compliance issues during unsafe weather conditions. Depending on the nature of a client company’s business, it may be a good idea to have a strict policy against working outside of the office, at least with respect to nonexempt employees. However, other laws may come into play, so it is important to take a look at this issue beyond inclement weather.
Regular consultation with counsel can help staffing firms maintain compliance under the FLSA and other applicable statutes. Regular review of pay policies and employee classifications can also mitigate the risks associated with joint employment and corresponding obligations.