Hurricane Sandy: Employment Issues for New York and New Jersey Employers
Labor & Employment Alert
As a result of Hurricane Sandy a number of issues have arisen concerning the payment of wages. Below is a brief summary of the most frequently asked questions.
Question: Must my business pay employees since we will be closed for the entire day?
Answer: It depends on the employee’s “exemption” status.
“Exempt” Employees: For the employees exempt from overtime rules — such as executives, managers and professionals — they must be paid for the entire day under the Federal Fair Labor Standards Act (FLSA). Briefly, an exempt employee’s work may not be docked if he or she is “ready, willing and able” to work, but was prevented from doing so by the employer’s decision not to operate.
“Non Exempt” Employees: Hourly, non-exempt employees only have to be paid for actual time worked (subject to exceptions such as “reporting time” pay laws such as those in New York, New Jersey, Connecticut, New Hampshire and Massachusetts), unless a contract (e.g. collective bargaining agreement) provides otherwise. Check with your Human Resources Department and/or employment counsel for the specific reporting pay requirements in your state.
Question: What if I am unable to open my business for a week?
Answer: United States Department of Labor regulations make clear that exempt employees do not need to be paid for any work week in which they perform no work. Accordingly, if because of the hurricane a business were forced to stay closed for a week, the business would not have to pay exempt employees such as managers and executive chefs.
Question: Can my business require exempt employees to use vacation time during a hurricane closure?
Answer: It depends. More than likely it is permissible to require exempt employees to apply accrued time off since neither the FLSA, New York or New Jersey law requires employers to provide vacation or other paid time off and the business would already be paying the employee. However, review employee handbooks and other policies to see if policy says otherwise.
Question: Do I have to pay my employees if they work from home during the storm?
Answer: Any exempt employee working from home must be paid. Any non-exempt employee who works from home during the storm (e.g., responding to emails, participating in conference calls, working remotely on the computer) must be paid for actual time worked. Such employees should be advised to carefully track working time.
Question: What happens if the business is open later in the week but an exempt employee can’t make it in to work (e.g., downed power lines by her house), must she be paid?
Answer: No, so long as she performs no work while at home. If an employee is absent from work because of weather it is considered an absence for personal reasons and the employee may be placed on “leave” in whole day increments. However, if this employee worked from home for even a few hours, she must be paid for the entire day.
Question: If this same exempt employee tried to get to work, spent two hours trying to navigate the streets of Long Island but could not make it in because of downed power lines and turned around and went home, must she be paid?
Answer: No, as long as she did not spend any time performing work while commuting. However, if she spent more than a de minimus amount of time making phone calls for work while stuck in the car, she must be paid for the whole day).
Question: The subways shut down at 7 pm. The business asked some non-exempt employees to stay late and help shut down the business, turn off electrical equipment and bring inside tables and chairs. As a result of staying late, it took these employees an extra two hours to get home. Do these employees have to be paid for the extra commuting time?
Answer: The law does not require the lengthier commuting time to be paid. However, employee relations may justify extra compensation.
Question: Our business has asked several members of the IT department and maintenance crew to remain “on call” and nearby to help protect infrastructure, do they need to be paid?
Answer: It depends. If these employees are unable to use the time effectively for their own purpose (e.g., remain “on call” from their own homes or perhaps a very comfortable hotel suite), the on call time is compensable.
Because of the intricacies of wage and hour law, and potential risks associated with Department of Labor audits and litigation, we advise consulting with counsel concerning specific issues before docking exempt employee wages.
If you have questions about this Alert, please contact Carolyn D. Richmond or any member of Fox Rothschild’s Labor and Employment Department.