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Boston-Area Lockdown Raises Pay Issues for Employers

Posted by Tom Jones on Apr 22, 2013 2:56:00 PM

Thousands of Massachusetts businesses remained closed Friday as employers in half a dozen communities complied with requests by public safety officials for people to remain at home.

Employment LawThe lockdown has left many employers wondering about the laws governing employee pay for an unscheduled day off due to public emergency. The primary question: How do you determine what to pay workers if your company is shut down for any period of time?

Human resource professionals emphasize that employers may wish to go beyond the letter of the law when making pay decisions about Friday, considering the protracted emotional toll of the Marathon bombing and subsequent weeklong hunt for those responsible.

“Friday’s shutdown of an entire metropolitan area was unprecedented and employers should keep in mind that workers did not report to the job because they were asked by the governor and other officials to remain locked in their homes,” said Karen Choi, Senior Vice President of Management and HR Services at AIM.

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.”
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.

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.

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. According to the AIM’s 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.

Topics: Employment Law, Human Resources

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