What Are Your Pay Obligations During This Natural Disaster?

With the massive wildfires currently affecting our region, many businesses have temporarily closed and those that have remained open have had difficulties maintaining regular operations as employees either cannot get to work or have personal obligations that keep them away. Employers may voluntarily choose to continue to pay all employees under these circumstances, but employers should be aware of the following minimum pay rules that apply:

 Pay for Non-Exempt Employees

Employees who are not exempt from overtime need only be paid for actual hours worked.  In addition, if you have to evacuate the workplace (or work is otherwise not available due to the fires) and you send non-exempt employees home after they have reported to work, you are excused from the “reporting time pay” premium that ordinarily would apply.  This is because the Wage Orders include an exception to the “reporting time pay” premium when lack of work is caused by an Act of God (i.e., natural disaster).

 Pay for Exempt Employees

If exempt employees are willing to work but unable to do so – for a matter of days, but less than a full workweek – because your business is closed or work is otherwise not available for them, you have to continue to pay their salary or else their exempt status could be jeopardized. However, if your business is closed and exempt employees are not otherwise working – for a full workweek – you need not pay their salary for that week.

If your business is open and work is available but exempt employees do not or cannot come to work, you may deduct from their accrued vacation or PTO bank in increments of half days (i.e., 4 hours) or full days. If the employees have no accrued time off, you may deduct from their salary but only in full day increments and only when the employees have not performed any work during that day.

If exempt employees report to work or work from home for less than half of a work day (e.g., 1 or 2 hours), you may only deduct a half day (i.e., 4 hours) from their bank of accrued time off. In this same circumstance, if the employees have no accrued time off, you must pay them for the entire day because you cannot make partial day deductions from their salary. Failure to follow these guidelines limiting deductions from pay could jeopardize the employees’ exempt status.

This E-Update was authored by Denise Brucker of Paul, Plevin's Transactional Practice Group. For more information, please contact, Ms. Brucker, or any Paul, Plevin attorney at 619.237.5200.