Employers Need to Prepare for Potential Employment Challenge Posed by Dorian
By Aaron Tandy | August 28, 2019
With Dorian eyeing the Florida coast, now is the time for Florida businesses to prepare for some of the challenges that may come. In addition to potential lost economic output, lost revenue and property and crop damage, employers need to be aware of employment laws affecting their business which may also be impacted by the storm.
Unlike some states that have rules regarding pay for inclement weather closure or require or encourage inclement weather days be paid time off, Florida provides little or no guidance to employers regarding compensating or disciplining employees who don’t come to work because of an impending hurricane, lose time because a storm closes a business or don’t return to work after the storm. Instead, private employers must look to the Fair Labor Standards Act and Department of Labor regulations, which provide for different treatment of nonexempt employees (entitled to overtime) and exempt employees (not entitled to overtime).
Further, an employer’s own policy manual or a collective bargaining agreement may need to be consulted to arrive at an answer, as will the Uniformed Services Employment and Reemployment Rights Act for covered employees such as a reservist or National Guard member who is called up to assist prior to, during or in the aftermath of a storm.
FLSA Mandates Treatment of Employee Pay
As a general rule, the FLSA obligates employers to pay nonexempt employees only for those hours that are actually worked. Therefore, if an employer closes a business early in anticipation of a hurricane, the employer is not required to pay nonexempt employees who are sent home due to the approaching storm. Nor is there a legal requirement to pay such workers, if the business remains closed during and after the storm. Such missed time is not considered to be “hours worked” for determining pay for nonexempt employees. However, employees employed under a flex-time or fluctuating schedule who are guaranteed payments regardless of the number of hours worked in a week are treated differently. So long as the business is not closed for a full work week, these employees must be paid their usual pay.
Moreover, time spent at work helping the business close or prepared for Dorian would be compensable, as would time an employer requires such employees to be “on call” or who are required to remain on site during a storm to assist business customers, such as hotel guests, or who “volunteer” to assist an employer during a natural disaster by performing their usual, customary duties. (Not-for-profit organizations who “allow” paid employees to “volunteer” during an emergency may be required to provide compensation when those employees are performing their regular job.) Conversely, if employees take shelter at an employer’s premises for their own safety or security, rather than to assist the business, such time is not typically compensable for nonexempt employees.
Businesses may allow nonexempt employees to use vacation time, paid time off or sick leave (so long as it is in compliance with company policy) to cover the time lost and receive pay; however, if employees have already used up such time, an employer is not required to provide more PTO days simply because the business did not operate because of a hurricane.
Businesses are free to provide compensation to nonexempt employees for time missed as a “bonus” or to boost employee morale but are not required to do so. However, any voluntary payments made would not be considered “hours worked” and so would not be counted toward a calculation of overtime. In addition, if nonexempt employees don’t return to work after the business reopened, businesses are not required to allow workers to make up missed time, even if Dorian negatively impacts transportation, and employers who arrange for ride-sharing after a storm must compensate the employee drive (but not the employee passenger) from the time of pick-up. Moreover, a failure to return to work without good cause after a storm passes can be grounds for termination for misconduct.
One wrinkle is that, if an employer has previously allowed nonexempt employees to telecommute (i.e., work from home or another location), employers will be responsible for compensating employees for hours worked and arranging to properly record and document this time while the normal business location is closed. And employers may be required to offer temporary telecommuting to disabled employees under the Americans with Disabilities Act, and pay these employees for hours worked outside the office or, if a covered business, allow employees affected by a natural disaster to take leave under the Family Medical Leave Act to care for themselves or family members whose care was impacted by the storm. (Employers also need to address how the length of a business closure due to a hurricane may affect the calculation of FMLA leave time for those employees who were out.)
A different set of rules apply to exempt employees. The FLSA requires employers to pay exempt employees their full salary if the business was closed for less than a week, regardless of how many hours the exempt employee actually worked. Conversely, if the business is closed for an entire work week then employers are not required to pay exempt employees for that week, unless these employees are permitted to telecommute and record any amount of working hours because then they must receive their full salary for that week. Once the business reopens, employees who choose not to come to work or not to work from home if it is permitted would be required to take a PTO day for the missed work or have deductions made from their salary for missing the full day of work so long as the absence is not for illness or disability or covered by an ADA accommodation or leave under FMLA.
Recovery of Lost Time
Efforts by businesses to “recover” some of that lost time following a storm must comply with the FLSA regulations, such as overtime rules. Businesses may not circumvent the FLSA simply because they lost productive time, although requiring exempt employees to make up time is permissible once business operations recommence. It is also possible that business interruption insurance might cover payments made to employees during the time the business was closed. Or, should Governor DeSantis declare a state of emergency, assistance may be available from programs such as the Federal Emergency Management Agency’s unemployment assistance program.
Consulting an employment attorney both prior to and after a storm is a positive step to keep employers from avoiding, even inadvertently, FLSA violations or unexpected pay obligations, including overtime, which may further impact businesses already dealing with the economic effects of Dorian’s pending visit to the Sunshine State.
Aaron Tandy heads Pathman Lewis’ employment law practice, helping employers and employees navigate complex employment issues. Contact him at email@example.com.