The last few months many employers around the United States have watched from the sidelines as fellow Americans have had to deal with the preparation, cumulative effects and aftermaths of Hurricanes Harvey, Irma and Maria that have impacted them, both on a personal level and on an organizational level. Employers who have not been affected may recognize potential short-term effects of disasters such as these but not realize the deeper effects on their organizations logistically, operationally and financially.
While many states are not impacted by hurricanes, there are both natural and man-made events that could easily shut business operations down indefinitely. Many organizations have safety plans, fire escape plans, fire extinguishers, and have probably even run a fire or tornado drill for their employees. But how far does an organization need to be involved in risk management? Should safety plans include emergency preparedness for buildings destroyed, when the electricity is off for multiple days, or when employees can’t get to work due to having children in daycares that have been shut down indefinitely? Are there systems in place for communications before, during and after a disaster? What happens to organizational functions that don’t have the luxury of coming to a standstill such as payroll?
In the small town of Henryville, Indiana, March 2, 2012 was a defining day. A tornado ripped through the town and changed life forever. As the title from a CNN report on March 3 reflected, “One day there was a town, the next day it was gone.” Buildings, including the local school, were destroyed. Employers were left to cope with damaged buildings and continuation of work-related activities through the immediate aftermath and in the months of recovery to follow. Employees were torn between needs from their families, homes, and work while they were dealing with personal physical and emotional issues.
On a much lesser extent, just recently business was shut down by an electricity loss that occurred due to a squirrel nibbling on nearby power lines. The pesky squirrel lost its life but also stopped all work for multiple days in the local businesses. At one mid-sized business, the back-up generator had not been properly maintained so with the electricity off, both the computer network and the phone system were also down. It was summer and over 90 degrees. The employer was left to determine if employees should stay and wait to see if the power would be restored. However, they had no idea that it would take several days. Business was at a standstill and the employer had to scramble as they had no policies or procedures in place for such an occurrence.
Although it’s impossible to outline every potential scenario, it is an employer’s responsibility to prepare for contingencies. This blog article is not intended to be an all-inclusive checklist. It is intended to help employers begin to think through possibilities and be prepared for a period of liminal space during and after a disaster – the time between “what was” and “what’s next”.
There are general procedures that all employers must develop as they consider both the safety of their employees and the continuation of business activity due to a natural disaster, an event that shuts business down, or the possibility of mandatory evacuations or government shutdowns of a city.
All managers should maintain an employee contact list and have procedures in place if an issue arises that affects employee working hours or safety. This protocol needs to be carefully considered in light of all employees. Last winter, one employer sent emails to employees for a late workday opening due to anticipated snow. The employer was so gracious to not only give employees extra hours and actually pay the nonexempt employees for that time off work! However, the email was sent late in the day and was only sent to known email addresses. Those employees who were part-time or who were not at work during the time the email was sent got up early and drove through dangerous road conditions only to discover that the building was closed.
Although many organizations have migrated data to the cloud, all employers need to ensure that they have solid back-up locations outside of their main office for data files, compensation data, and legal documentation. The organization must also be able to access contact information for federal agencies, suppliers, customers, and any others necessary for business to continue.
Employers are encouraged to review the ability of payroll and benefit systems to continue functioning in a disaster. If utilizing a payroll company, it’s important to know if the company has systems in place to assure effective processing of payroll and direct deposits even if their offices and the banks are shut down.
If an organization closes for less than a full workweek, exempt employees must still be paid. Although in most states, the employer may require that employees use paid time off to cover their nonworking time. If the organization remains open and the exempt employee arrives late or leaves early, they must be paid. There is no legal requirement to pay nonexempt employees who do not work because the organization is closed, except for nonexempt employees who are paid under the conditions of a fluctuating workweek. However, employers need to take into consideration any collective bargaining agreements or organizational policies that may have payment obligations. If the organization will be closed indefinitely, the employer may want to consider alternative creative solutions for work to be accomplished both for the benefit of the organization and for the morale of the employees.
There are employment-related laws geared to protecting employees that may affect organizations during and after a natural disaster. Employers who are developing risk management strategies should be aware of these laws and regulations such as the Fair Labor Standards Act (FLSA). The FLSA is best known for defining employee classifications such as exempt and nonexempt employees, and minimum wage standards. However, it also clarifies many other standards including on-call employees who are required to remain on-call at the employer’s premises to deal with emergency repairs even if they perform no work while on-call, and waiting time for employees. If an employee is required to wait at the employer’s place of business, that time is compensable. In thinking back to the squirrel that shut down operations, those employees were required to remain at work to wait for the power to restart, and had to be paid accordingly.
Through the Family and Medical Leave Act (FMLA), employees affected by a natural disaster are entitled to leave for a personal serious health condition, or for a serious health condition of their child, spouse or parent caused by the disaster. One disaster may be serious enough to create a need for multiple employees to be on FMLA leave all at the same time.
Employees who are physically or emotionally injured as a result of a catastrophe may be entitled to reasonable accommodations through the Americans with Disabilities Act and its Amendments Act (ADAAA). Even if there is no visible sign, disability is defined in an extremely broad fashion for physical or mental impairment and it is better for the employer to be proactive than to undergo a potential charge of discrimination.
The Occupational Safety and Health Act (OSHA) requires that employers provide their employees a safe and healthful working environment. Employers are responsible to protect employees from unreasonable danger in the workplace that could threaten their safety and health. Employers must carefully weigh whether they want to require employees to come into work during adverse weather where they may be exposed to the possibility of an accident such as slipping or falling, flying objects, or electrical hazards from downed power lines. Both OSHA and the National Labor Relations Act (NLRA) give employees the right to refuse to work in conditions they believe are unsafe and employees who feels they have been put in imminent danger because of being forced to go to work during a natural disaster may file a complaint with OSHA.
There is no easy “quick-fix” for employers as they consider possibilities of natural disasters such as the hurricanes or tornados. It is recommended that employers consider risk management as they would an insurance policy. In the insurance world, there are different philosophies that individuals hold that relate to the potential of risk. Some people don’t believe in any type of insurance policy and feel that the money spent for insurance is a waste of their resources. Others purchase much more insurance than is necessary for the “what if” possibilities in their lives. Granted, a tragic event may never happen. However, if it does, it is recommended that employers be aware of, and prepared for the economic, physical and emotional toll that it will take on both the organization and the employees.
For additional information on this topic, please contact us at www.newfocushr.com.
Written by: Kathi A. Walker