At times, emergencies such as severe weather, fires, power failures, or earthquakes, may disrupt company operations. In extreme cases, these circumstances may require the closing of a work facility. Employers frequently ask, “How should we pay our employees during these times of emergency situations?” and/or “Should we have a company policy defining the definitions of what constitutes business operations being closed with regards to pay?” As a human resources professional, I believe that it is always a good idea to define a company’s policy when it comes to a business being closed and the pay of their employees. This policy should be included in a company’s employee handbook, so that all employees understand what is expected of them and how they will be paid in the event of a company closing.
When company operations are closed due to emergency situations, it is recommended that the time off from scheduled work be paid to employees. However, in some situations this would not be feasible for some employers, i.e. in the case of a fire, earthquake, etc. where it is going to take many days, weeks or months to reopen a work facility. So, in the employee handbook policy, make sure that you define how long employees may expect to be paid following an emergency closing.
In situations where an emergency closing is not authorized, employees who fail to report for work should not be paid for the time off and should be required to use any available paid time off, i.e. vacation time, sick time, etc. to cover the absence. If an employee does not have any paid time off, allowing him/her to take unpaid leave may be acceptable for a short period of time. However, in extreme situations, meeting with the employee to document their extended unauthorized absence(s) may be appropriate.
When employees in essential operations are required to work on a day when operations are officially closed due to an emergency, employees who work should receive regular pay. In the event that the employer wishes to give something “extra” to those employees who are required to work when operations are officially closed that is fine and considered to be a good will effort on behalf of the employer. However, there is no law that states that employees be paid any additional amount when required to work when the business is closed, unless the extra hours result in an overtime situation for nonexempt employees.
So, if you have closed your business operations due to an emergency situation or think that you may need to do so at some point in time, make sure that you are paying your employees appropriately. Clearly defining your expectations in an employee handbook policy is critical to maintaining good will with your employees and should increase morale when the emergency situation arises.
Written By: Kristen Shingleton, M.B.A., CCP
President, New Focus HR LLC