Paying Employees When the Business is Closed, by Mark Perlberg, VP, PEO
When your business must temporarily close for something out of your control like inclement weather, are you still obligated to pay your employees? The answer is based on several factors, including the Fair Labor Standards Act (FLSA) classification and any state-specific rules that may apply. In general, if the office is closed for a natural disaster such as a snowstorm or hurricane, and employees are exempt and worked any portion of the work week, you must pay them their entire salary. The rules are different for nonexempt, or employees.
Usually, if a nonexempt employee does not come to work for whatever reason, you do not need to pay him or her. However, in addition to complying with the legal requirements, you should also consider how your employees will feel about your decision when deciding whether to pay them. If you decide not to pay because you are not legally obligated to do so, will you harm employee morale? Should you consider paying employees for the day or part of the day? This gesture could effectively communicate that you are a caring employer and committed to your employees’ well-being. It’s important that employers develop a consistent policy regarding how they will handle employee pay in the event of unforeseen circumstances.