Tragic events such as the fires currently affecting both Northern and Southern California often leave employers unable to run business as usual. Be it property damage or safety concerns, this disruption in business can leave employers asking how to manage their payroll under the circumstances. The following provides a quick guide to such issues:
Nonexempt Employees: Both Federal and California Law only require employers to pay nonexempt employees for hours that the employee actually works. An employer is therefore not required to pay nonexempt employees if the employer is unable to provide work to those employees due to a natural disaster.
NOTE – On call time: Employees who are required to remain at or near an employer’s premises are “on call” and the employer is required to pay these employees for such time. For example, even if they perform no work, employees who are required to remain on premises to deal with emergency repairs must be compensated.
Exempt Employees: An employer is required to pay an exempt employee’s full salary if the worksite is closed or unable to reopen for less than a full workweek. However, an employer may require an exempt employee to use his or her allotted leave for this time—despite this option, if the employee does not have a leave balance, no equivalent deduction from salary may be made.
NOTE – Exempt Employees who choose to stay home: If the employer is open for business, an absence caused by transportation difficulties experienced during natural disasters may count as an absence for personal reasons, such that certain deductions are allowed. Under this circumstance, an employer may place an exempt employee on leave without pay (or require the employee to use accrued PTO) for the full day that he or she fails to report to work. Importantly, deductions may only be made for full day absences—if an exempt employee is absent for one and a half days for personal reasons, the employer can deduct only for the one full-day absence.
Reporting time pay: California law guarantees at least partial compensation for employees who report to their job expecting to work a specified number of hours but who are deprived of that amount of work because of inadequate scheduling or lack of proper notice by the employer. While reporting time pay is not required where the work interruption is attributable to “an Act of God or other cause not within the employer’s control,” employers should make every effort to communicate the business closure and lack of work to employees before they report to work.