With the weather forecast predicting record-setting snowfall in the Northeast, many employers are preparing to close operations again tomorrow. But how to handle snow days when it comes to calculating payroll? Here's the run-down.
The Fair Labor Standards Act (FLSA) prohibits employers from reducing the pay of any exempt employee based on the quantity or quality of his work or when he is ready, willing, and able to work but no work is available. Applying that basic principle, the U.S. DOL has taken the position that employers that decide to close because of weather conditions must pay exempt employees their regular salaries for any shutdown that lasts less than one full week.
On the other hand, nothing prohibits an employer from requiring employees, including exempt ones, to use accrued vacation time or other time off to cover the missed work. The FLSA doesn't require you to provide vacation or leave time at all, so there's nothing to prevent you from giving your employees vacation or paid time off (PTO) but then requiring them to take it on certain days. A private employer may therefore deduct the period of absence due to bad weather from an employee's remaining vacation or leave time, whether the absence is a full day or a partial day, so long as you pay exempt employees their regular salaries for that time.
The practical problem, of course, is that when bad weather hits, some exempt employees may not have any vacation or leave time left. Or they may have already scheduled to take off — and received approval to use — whatever vacation or leave time they have remaining. Even if an exempt employee has no time off remaining, she still must be paid her regular salary when the organization is closed because of bad weather for less than a week. The DOL has made it clear that you must pay employees in those circumstances, even if you offer no vacation or PTO benefits at all and even if you provide those benefits but the employee has no remaining accrued leave available.
There's no legal prohibition against applying PTO to days missed because of a facility closure and canceling part or all of approved vacation time for exempt employees who have time remaining but have approved plans to use their PTO on other days. You should first consider the inevitable negative effect of that practice on employee morale, however.