You should know your rights and obligations if your company faces inclement weather and causes operations to close for the day. Whether it be flooding, wildfires, natural disasters, snow, rain, or ice storms, small business owners should have a policy or plan in place that allows the employee(s) to understand if employers have to pay them in the event of bad weather.

What kind of employees do you have?

Not all companies are created equal. Many companies and organizations employ a variety of employees depending on many factors. The two different employee types are exempt and non-exempt employees.

Knowing the difference between the two can be quite confusing to both employees and employers. It is very important to understand the two since laws are different between an exempt employee and a non-exempt employee.

What is the difference between exempt and non-exempt employees?

The Fair Labor Standards Act (FLSA) has established and implemented rules and regulations that help identify the differences between exempt and non-exempt workers.  

Exempt Employee

An exempt employee is a type of employee that is usually paid on a salary basis and is not entitled to overtime pay.

For example, an employee could be set on a salary to earn $45,500 per year, which would break down to $875 per week. Typically the salary is based on a 40-hour workweek, but the chance to work overtime without additional pay is a possibility.

Visit the United States Department of Labor for more information regarding some jobs that are labeled exempt under the law.  

Non-Exempt Employee

Now that you understand what an exempt employee is, what is a non-exempt employee?

Non-exempt workers are paid hourly and are entitled to overtime pay (time and one-half of normal hourly wage) and minimum wage benefits while on the clock.

This kind of employee is only paid for hours that he or she has worked. For example, if the employee makes $15 per hour and works 40 hours per week, then their weekly pay would be $600.

• This amount is calculated by simply taking the hourly pay and multiplying it by the number of hours worked.
• $15 x 40 = $600

Who are you obligated to pay if there is bad weather?

FLSA does not require employers to pay their non-exempt (hourly) workers if the weather causes the business to close for the day. However, according to an article by Insperity, some states have adopted “show-up pay” or “report-in pay” laws that provide some minimum guaranteed to pay for non-exempt employees who arrive for work but are sent home early. The article also goes on to mention that employers are required to pay at least the time worked when an employee is sent home early, according to federal law.

According to an article by The Balance Careers, if a business is closed due to bad weather, and the exempt employee has worked that week, that individual is owed their full salary. But if an exempt employee decides to take a day off and the business is open, then he or she is not owed wages unless they use paid time off or vacation time if available.

What you should do

Every company is different, but it’s important to follow the law accordingly. OnTheClock recommends developing a plan and guidelines for this situation and is sure to go over it with your employees. Afterward, be sure to follow the law and pay your employees what they are entitled to.

Keep in mind that employees do not have any control over the weather and you should look out for their best interest. In a society where 78 percent of full-time workers live paycheck to paycheck, it means a lot to your workers when you are willing to compensate them for weather conditions that cause your business to close.