Managing Employees

To Pay or Not to Pay on Snow Days

To Pay or Not to Pay on Snow Days
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Oh, the weather outside is frightful, and the roads are not delightful; but since we all need the dough, gotta go, gotta go, gotta go…to work, that is. 

For most people across the country, this is the typical mantra during the winter weather.  While New York City dodged a bullet recently, other parts of the Northeast where hit hard.  

Be it winter, spring, summer or fall, inclement or extreme weather can wreak havoc on a small business. Something as simple as a thunderstorm which results in a power outage can damage your bottom line.  Raise it up a notch, to a tornado, snow storm or hurricane, and the damage climbs exponentially.  So before Mother Nature shows her dark side, there are a few things every small business needs to decide: What happens if inclement weather closes your business, and/or makes it virtually impossible for employees to make it to work?

The good news is this: It’s up to you and your team to decide on a policy when it comes to weather-related absence and tardiness.  If you have employees who are covered by a collective-bargaining agreement, or an individual employment agreement that specifically outlines bad weather policy, you’re required to follow those contractual provisions.  Small business owners will usually need to determine if weather-related absences will be excused or unexcused, what the notification procedures are, and if workers will be allowed to make up the lost time at a future date. That’s the easy part. The hard part?  Pinching the paycheck.

To pay or not to pay is typically dependent on your company policies, too.  Under the Fair Labor Standards Act (FLSA), you are NOT required to pay non-exempt employees for time not worked, including that which occurs during extreme weather. Non-exempt employees are typically paid by the hour, not salaried. Even if your business completely shuts down for bad weather, or if it’s open and employees can’t make it to work, you are not required to pay non-exempt employees for hours missed. On the other hand, you are allowed, and can even require, that your employees use vacation or other types of paid time-off if absent or tardy.

Related: 5 Tips for More Easily Managing Your Human Capital

Exempt employees can’t have their salaries reduced “for absences occasioned by the employer,” so if your company closes due to bad weather for less than a full workweek, you must pay exempt employees their full salary for that week.  Even if your business stays open but an exempt employee fails to report to work due to the weather, you need to be careful with salary deductions. If an employee doesn't have enough leave to cover the snow day, you can grant it now and them make it up later.  One thing is certain: You need to decide NOW on a policy that is perfect for both hourly and salaried employees.

If you or an employee have any doubts, the following from the Labor Department should eliminate them: "The Department of Labor considers an absence due to adverse weather conditions, such as when transportation difficulties experienced during a snow emergency cause an employee to choose not to report for work for the day even though the employer is open for business, an absence for personal reasons. Such an absence does not constitute an absence due to sickness or disability.

Should the business choose to close, the Fair Labor Standards Act says, "If an employee is ready, willing and able to work, deductions may not be made for time when work is not available."

My best advice -- consult with your legal counsel.

Related: This Essential Leadership Trait Can Push Employees to Do Their Best