Picking Up the Pieces after a Natural Disaster

Picking Up the Pieces after a Natural Disaster

Hurricanes Harvey and Irma are a devastating start to the storm season, a period that often continues into the spring, bringing challenges to both employers and employees. We’ve outlined some best practices surrounding common concerns following a natural disaster. Keep in mind that employers can always provide more generous pay, time off and benefits to their employees impacted by these events than the laws require. How employers treat employees affected by a disaster can impact the company’s employee relations and reputation with customers and the community.

Pay
Employers often ask whether they need to pay employees when bad weather forces an office closure. Employers with unionized workforces should check their collective bargaining contracts that may provide guaranteed pay regardless of the time actually worked. For nonunion employers, the answer typically depends on a couple of things:

Employee classification

    • Most businesses are covered by the federal Fair Labor Standards Act (FLSA), which provides guidelines and restrictions for paying exempt and nonexempt employees. Payment for time not worked when workplaces are closed during bad weather is different depending on whether the employee is exempt or nonexempt from overtime pay.
    • For nonexempt employees, or those eligible for overtime pay, there is no obligation to pay for time not worked. However, under certain state laws, employers must compensate nonexempt employees under call-in/reporting pay laws. In these situations, nonexempt employees who show up to work when the office is closed or are required to be “on call” may need to be paid. These pay obligations vary, so be sure to check your local laws. 
    • For exempt employees, who must be paid on a “salary basis” under the FLSA, the bottom line is that they must be paid their full salary if they perform any work in a workweek. If they are ready, willing, and able to work, deductions cannot be made for time when work is unavailable—even if the company is closed due to inclement weather. However, the regulations also state that exempt employees are not required to be paid for any workweek in which they perform no work. Therefore, if the office is closed for a full workweek, exempt employees do not need to be compensated as long as they perform no work. Additionally, if the company is closed, an employer can require the employee to use accrued PTO. Exempt employees may be required to use PTO for all or part of the day as long as the employees receive their full pay for the workweek. 

Advance notice or not

    • For nonexempt employees, if they are told in advance not to come to work and the employees stay home, then the employer is under no obligation to pay them for the time off. The employer and the employee can choose to use accrued PTO to compensate the employees for the missed workdays. However, in some states under reporting time pay laws, if an employee shows up without prior notice of an office closure, you may have to pay him or her for a portion of the day.
    • For exempt employees, the salary basis rule still applies. If state laws permit employers to do so, employers may deduct from the exempt employees’ accrued PTO balances to be “salary basis” compliant. The employer should ensure, however, that these employees have not done any work from home during the office closure. The FLSA does permit employers to make deductions from an exempt employee’s salary when he or she is absent due to personal reasons for one or more full days. 

Working from home
Employees may request to work from home following a storm or similar event. In this case, policy is everything. Employers are not required to allow an employee to work from home, regardless of their FLSA status. The employer can decide if working from home is feasible and reasonable, but should have clearly communicated policies and expectations regarding working from home during office closures prior to any such closure. Further, these policies should be uniformly applied.

Notification
If you’re a rule follower, you will be disappointed to learn that there are no federal or state laws that define how a company must notify employees of office closures in the event of natural disasters, but that doesn’t mean it shouldn’t be a priority.

Proactively implement a policy and check-in procedure for all employees so they know if the business is closed or not and so you know your employees are safe. Consider that cell service may be unavailable and internet connections can be iffy after a storm or natural disaster, so land lines and old fashioned phone trees might be the most effective plan. Employers often use a variety of methods to reach employees, including text messages, phone trees, website notices, or recorded messages at a call-in number. Following a storm or natural disaster is definitely the time to over communicate.

Benefits and employee assistance programs
Reminding employees about the benefits available to them, including employee assistance for emotional or financial support, and how to access those benefits can be useful in times of stress.

On August 30, the Internal Revenue Service (IRS) announced that individuals adversely affected by Hurricane Harvey can take loans or make hardship withdrawals from their company retirement plans (401(k), 403(b) and 457(b) funds). You may wish to help your employees take advantage of this program by pointing them toward this information.

Helping
On September 5, the IRS announced support of leave-based donation programs that allow employees to donate the value of their paid time off to support the victims of Hurricane Harvey. Under this program, employers can contribute the value of employees’ PTO contributions and take a business expense tax deduction instead of a charitable contribution. The donations must be made to nonprofit organizations specifically earmarked for Hurricane Harvey relief and must be made by January 1, 2019. Employees who donate their PTO cannot claim that as a charitable deduction but will not be subject to income or Social Security taxes on the donations.

For those employees who are members of a volunteer responder unit or the National Guard and are called for duty, be sure to check state laws for allowing job-protected time off.

Safety
If the workplace is damaged, employers should ensure that there are no physical hazards that would pose safety risks for employees. Watch for signs of fatigue if employees are working additional hours to cover for colleagues who cannot be at work.

Show the love
Ultimately, people are the key to the success of any business, and the time to embrace your staff and be as generous and flexible as possible is after a storm or natural disaster. Understanding that employees nationwide may have friends and family affected by a natural disaster, even if the event was not in your location, is important. Employees may be under additional stress and struggling with uncertainty. Allowing flexibility and time off will show employees you’re willing to help them through a difficult time.