EMPLOYERS MUST MEET MANY PAYROLL OBLIGATIONS, DESPITE HURRICANE DISRUPTIONS
Q: Besides the physical devastation and emotional toll that Hurricane Harvey is taking on the Texas workforce, there are disruptions to payroll and questions about an employer’s obligation under federal and state wage and hour laws. What do employers need to consider?
A: Employers need to understand that the Federal Labor Standards Act (FLSA) continues to apply during natural disasters and recovery efforts. Hurricane Harvey has prevented some Southeast Texas employers from being able to process payroll for their employees, and these employers may question whether they are accruing penalties during this time. Although the FLSA and Texas Labor Code require payment of wages on regular paydays, neither law requires that payment be made on any particular day following the end of a pay period. Further, there’s no specific penalty in place for Texas employers that miss a payday. Therefore, if employers have experienced problems processing payroll due to the weather, they should work to ensure all employees are paid as soon as possible, but do not need to be concerned that penalties are accruing.
Q: What about a nonexempt employee who has missed work due to the storm and its aftermath?
A: Employers only are required to pay nonexempt employees for hours actually worked. Thus, regardless of whether an employee is off work because the business is closed due to the facility being inaccessible or unusable, or because the employee is unable to come to work, the employer has no duty to pay employees for this time (unless, of course, some company policy provides for pay in these circumstances). If a nonexempt employee performs work remotely, the employer is still required to pay that employee. Nonexempt employees must be paid for all hours actually worked, whether at the business location or remotely.
Q: And for exempt employees?
A: Different requirements apply for exempt employees. If an employer’s workplace is closed due to a natural disaster, the employer still must pay exempt employees their regular weekly salary if the employee performs any work during that workweek. If, however, an exempt employee is absent for personal reasons (i.e., the employee can’t come to work because he/she can’t leave home or is attending to personal issues), and if that employee doesn’t have vacation, personal days, or other paid time off that will cover the absence, the employer can deduct from the employee’s pay for any full day missed. Employers mustn’t deduct from an exempt employee’s salary for partial days missed, although they can deduct from paid time off balances for partial day absences. Exempt employees need to be paid their full weeks’ salary for every week in which they do any work, regardless of whether the work is performed at the employer’s place of business or remotely, unless the employer can show that the employee was actually “absent” (i.e., not working remotely) during one or more of those days.
Gaylan Towle II is a member of Crowe & Dunlevy’s labor and employment practice group.