As you assess the impact of the February winter storm, Jackson Walker attorneys can help advise you on the legal implications for your business. For additional insights and resources, visit our Winter Storm Recovery site.
The recent winter storm caused major disruptions for Texas businesses, including closures due to loss of electricity, water issues, property damages, and transportation issues. As businesses deal with the fallout of the storm, employers may be wondering whether they are responsible for compensating employees during the interruption. Jackson Walker Labor & Employment partner Dawn Holiday discusses multiple issues surrounding employer’s responsibilities for exempt and non-exempt employees, and the expectations placed on employees during the winter storm disruptions. In addition, Dawn explains some of the actions that the Jackson Walker Labor & Employment team takes to help employers prepare for future business disruptions.
Greg Lambert: Hi, everyone. I’m Greg Lambert, and this is Jackson Walker Fast Takes. The recent winter storms caused major disruptions in businesses and resulted in businesses needing to close due to the lack of electricity, water issues, damages, or transportation issues. As a result, employers may be wondering about the responsibility for paying employees during this interruption. I asked Jackson Walker Labor & Employment partner Dawn Holiday to discuss this and give employers some issues to think about as they move back to normal business operations.
Dawn, thanks for taking the time to talk with me.
Dawn Holiday: Thanks for having me.
Greg Lambert: Dawn, for Texas employers, what are their responsibilities for their employees if they actually did have to shut down operations during the storm last week?
Dawn Holiday: Well, Greg, whether or not employees are paid depends on whether that employee is exempt or non-exempt.
Greg Lambert: Can you just define what the difference is between an exempt employee and a non-exempt employee is?
Dawn Holiday: Sure. A non-exempt employee is an hourly employee, and an exempt employee is considered a salaried employee.
For non-exempt employees, under the Fair Labor Standards Act, employers are generally not required to pay non-exempt employees for any days that the employee does not perform any actual work. This applies to days they did not come to work or for days when the business was closed because of a weather-related event. However, non-exempt employees must be paid for hours worked from home or any other location. So, if a non-exempt employee is performing work away from their site location, the employers need to take steps to determine the nature of the work that they’re doing and the actual amount of work that they did. Employers are required to pay non-exempt employees for any time those employees are required by the employer to be on-call or standby even if the business is closed. If the employer has PTO, or paid time off, if that is exhausted due to the business closure, then no compensation is required.
On the other hand, for exempt employees, the Fair Labor Standards Act states that exempt employees almost always must be paid when they work any portion of a workweek, including situations such as inclement weather. If the business closes because of the weather, the Fair Labor Standards Act requires employers to pay an exempt employee his or her regular salary for any shutdown that lasts less than one workweek. It’s important that we focus on less than one workweek. A private employer may, however, the deduct the period of absence from the employee’s paid vacation or PTO as long as the employee receives his or her full salary for that week.
As I previously stated earlier, if the exempt employee performs any work during the workweek, he or she must be paid their full salary. However, exempt employees are not required to be paid their salary in weeks in which they perform the work. So only when the business is closed for more than one week and the exempt employee performed no work during that week, the employer is not obligated to pay.
Greg Lambert: For the businesses that may have remained open last week, but let’s say the employees had damages that their homes or maybe they couldn’t access work because of power or internet service didn’t work or a number of other reasons, what are the responsibilities of the businesses in that case?
Dawn Holiday: If a business is not closed and the employee is not able to come to work or work remotely, non-exempt employees are not paid if they don’t work, even if they cannot go in because of weather emergencies, road closures, or power, internet, or phone outages. But they must be paid if they’re required to be on-call or standby even if the business is closed.
For exempt employees who choose not to work or cannot come into work or cannot work remotely, the Department of Labor considers these as personal absences. So, employers may deduct from an employee’s salary for any full days during which he or she performs no work.
Greg Lambert: Dawn, is there any other issues that employers need to be thinking about, or is there any issues that you as a labor and employment attorney seemed to hear about during situations like this?
Dawn Holiday: Yes. So, employers should be thinking about the policies that they have in place that cover situations like this – natural disasters or emergencies.
Here at Jackson Walker, our Labor & Employment attorneys often work with employers to draft tailor-made policies to help minimize business interruptions during weather-related events. These policies include absence control policies, and these policies set a standard period of time for which an employee can be absent from work before termination; PTO policies, and they provide details as to when employees are required to use paid time off in the event the employee is unable to work; and also, employers should consider inclement weather policies, and these policies inform employees of expectations and procedures for checking in, showing up, remote work, or leaving the place of business before the end of the business day. These policies, along with others, can provide and have proved to be a valuable resource for extreme weather events, natural disasters, as they ensure that employees and employers have a mutual understanding of how each situation regarding pay and attendance will be handled in a natural disaster or emergency weather-related event.
Greg Lambert: Dawn Holiday, thank you very much for taking the time to talk with me.
Dawn Holiday: Thank you.
The music is by Eve Searls.
This podcast is made available by Jackson Walker for informational purposes only, does not constitute legal advice, and is not a substitute for legal advice from qualified counsel. Your use of this podcast does not create an attorney-client relationship between you and Jackson Walker. The facts and results of each case will vary, and no particular result can be guaranteed.
Please note: This article and any resources presented on the Jackson Walker Winter Storm Recovery site are for informational purposes only, do not constitute legal advice, and are not a substitute for legal advice from qualified counsel. The laws of other states and nations may be entirely different from what is described. Your use of these materials does not create an attorney-client relationship between you and Jackson Walker. The facts and results of each case will vary, and no particular result can be guaranteed.