Storm Leaves Employers Snowed on How to Pay Workers
Last weekend’s freak snowstorm disrupted hundreds of businesses. Some closed. And some workers couldn’t get to work, leaving employers trying to figure out who should be paid and how much.
Massachusetts regulations define reporting pay this way: “When an employee who is scheduled to work three or more hours reports for duty . . . and that employee is not provided with the expected hours of work, the employee shall be paid for at least three hours on such day at no less than the basic minimum wage.”
What does it mean to your company? Here are specific examples:
- A non-exempt (hourly) employee reports for work, but the company is closed - The employer must pay the employee at least $24 in wages (3 hours x minimum wage).
- A non-exempt employee reports for work, the company opens for a short period and then closes - The employee must be paid actual wages for time worked and minimum wage for remaining time, up to 3 hours.
- A non-exempt retail employee reports for work on a Sunday (law requires 1.5 times base pay for Sunday and holidays) - The employee must be paid at least $36 (3 hours x Sunday minimum wage of $12 per hour).
- Exempt employees - Employers may not deduct time from an exempt employee’s pay when closing early due to the weather. Any unauthorized deduction runs the risk of losing exempt status.
Managing the issue
Many companies find it too difficult to rely on managers to reach all employees in a timely fashion before they report to work. Employers wishing to avoid this problem should consider establishing a phone message loop and require that all employees call into the message system before leaving their house if there is a risk of closing due to the weather.
Put the requirement in your handbook and make sure all employees are aware of it. And then enforce the rule. That means that if someone ignores it and reports to work when you were closed, you will owe the employee show-up pay, but you may also discipline the employee for violating the policy.
Alternatively, employers should use local media (radio and television) to communicate that they are closed. While you may also post the closing notice on your Web site, remember that asking employees to check the Web site/email prior to leaving for work may invite requests to be paid for that time by non-exempt employees.
Addressing employee morale
Although an employer is required to pay only minimum wage, many companies elect to pay employees their actual wage for the three or four hours (half day pay) in the interest of employee relations. Most AIM members pay more than minimum wage.
How do most employers deal with wages foe weather closings? According to the AIM’s 2011 Statewide Compensation Survey:
- 34 percent of employers pay four hours, with most paying regular wages;
- 28 percent pay 3 hours, with most paying regular wages;
- 15 percent pay more than four hours, with most paying regular wages; and
- The remaining 23 percent report other pay practices.
If a non-exempt employee wants to be paid for the balance of the day (5 hours), allow the employee to charge paid time off to make up for the lost pay.