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Compensating Salaried Employees Absent Due to a Weather Emergency
The Fair Labor Standards Act (FLSA) mandates that employers recompense their workforce for all hours they are "compelled or allowed" to labor. This necessitates that an employer remunerate their employees not only for actual working hours but also for the periods during which employees must remain available for subsequent assignments.
When weather emergencies impede a salaried employee's ability to report for duty, inquiries regarding compensation can arise. In such instances, employers must ascertain whether it is legally tenable to withhold or deduct pay for absent salaried employees.
Per the Department of Labor (DOL), the obligation of employers to disburse employee wages during weather-related absences hinges on two pivotal factors:
- The exempt status of the salaried employee concerning FLSA requisites.
- The operational status of the employer during the weather emergency.
Receipt of a fixed salary does not automatically confer exempt status upon an employee under the purview of FLSA regulations. An exemption from FLSA regulations is only granted if an employee satisfies all the specific criteria delineated within the FLSA framework. The most prevalent exemptions for salaried personnel fall under the ambit of "white-collar exemptions."To qualify for a white-collar exemption, an employee must meet the following criteria: the salary basis test, the salary level test, and the duties test.
- The salary basis test ascertains that the employee receives a predetermined and unalterable salary immune to fluctuations in work output or volume.
- The salary level test ensures the employee attains a stipulated minimum salary threshold for exemption eligibility.
- The duties test mandates that the employee's job responsibilities align with executive, administrative, or professional roles, as legally defined.
The significance of the salary basis test becomes conspicuous when contemplating withholding or deducting pay for salaried employees unable to report for work during a weather emergency. An exempt employee unequivocally meets the salary basis requisites when their salary is disbursed whenever they are "prepared, willing, and able to work," irrespective of the presence of work assignments from the employer.
Nonetheless, the FLSA permits employers to effect lawful deductions or withholdings from the wages of exempt employees in cases of full-day absences due to personal reasons (excluding illness or disability).
In situations where an employee is absent for two entire days to attend to personal affairs, their salaried status remains unaffected if deductions are made commensurate with the two full-day absences. However, if an exempt employee is absent for one and a half days due to personal reasons, the employer is authorized to deduct only for the one full-day absence.
Operating During a Weather Emergency
As per the DOL, an exempt employee not reporting to work during a weather emergency is deemed to be absent for personal reasons when the employer continues its operational activities. In this context, employers are within their legal rights to deduct or withhold wages for each full day the employee remains absent from work.
However, salaried exempt employees who report for duty—regardless of the tardiness of their arrival or the number of hours worked on that day—must be compensated for a full day's labor.
Furthermore, the DOL has articulated that employers may compel salaried exempt employees to utilize accrued vacation or leave entitlements to offset hours lost due to a weather emergency under certain conditions:
- The employer possesses a bona fide vacation, paid time off, or leave scheme.
- The employee has accrued such benefits at the time of the weather emergency.
- The deduction will not lead to a negative balance of accrued benefits.
- The employee does not currently carry a negative balance of accrued benefits.
- Compensation for accrued benefits ensures that the employee receives an amount equal to what they would have earned had they not been absent or late to work due to a weather emergency.
Closure During a Weather Emergency
An employer is obligated to remunerate its salaried exempt personnel for their readiness, willingness, and ability to work on a workday, irrespective of the employer's capacity to provide work assignments. According to the DOL, an employer forced to close due to a weather emergency is unable to furnish tasks for salaried exempt employees but must still compensate them if these employees are ready, willing, and able to work. Consequently, employers cannot withhold or deduct any portion of a salaried employee's wages if their absence stems from the employer's closure for the day or an advisory against reporting to work due to the weather emergency.
Determining compensation for nonexempt employees is a more straightforward endeavor. The FLSA obliges employers to remunerate nonexempt employees exclusively for hours worked. Consequently, employers are not compelled to compensate nonexempt employees for unworked hours due to a weather emergency; remuneration is restricted to hours worked on that particular day.
"On-Duty" and Remote Work
In assessing whether an employee has engaged in work or incurred absences during a weather emergency, employers should consider the employee's "on-duty" status and potential for remote work. To accomplish this, employers must ascertain whether their employees' activities qualify as "work," thereby entitling them to accrue compensable time.
For additional insights on FLSA wage disbursement and work-hour requisites, please reach out to TPG Insurance Services.
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