Paying Employees Following the California’s Wildfires: What Employers Must Know
California Wildfires Create Employer Labor Compliance Issues
California’s wildfire season officially started in October, yet it is already the worst wildfire year in the state’s history. Tragically, many homes and businesses have been destroyed by wildfires. In wine country, workers would have returned to the wine presses and instead, have had to evacuate.
As a result many business owners and payroll specialists are wondering how to handle federal and California state employment laws during this emergency. The purpose of this article is to review how and when employees should be paid during a natural disaster and what state laws apply.
Paying Exempt Employees During a Natural Disaster
During a natural disaster such as the California wildfires, exempt employees must be treated in a specific manner. When a business closes from natural disasters for less than a week, the employer must pay the exempt employees for their regular salary for that week.
Under the Fair Labor Standards Act (FLSA) exempt employees who are ready to work, but no work is available cannot have their pay deducted when the employee is ready or willing to work, but no work is available. Otherwise they are at risk of losing their exempt status under the Fair Labor Standards Act (FLSA).
However, an employer can deduct the employee’s paid time off (PTO) or vacation pay for time missed while the business is closed, as long as the employee receives his or her full pay for the entire week.
If the employee does not have any paid time off balance, then the exempt employee must still be paid during business closures that are less than a week long.
If the business is open, but the employee is unable to get to work, then the business can deduct a full day’s salary from the employee’s wages. The FLSA allows employees to deduct exempt employees pay with a full day’s salary without jeopardizing exempt status. However, if the employee works for any amount of time during the day and the business decides to close due to weather conditions, then the employer cannot deduct a partial day’s salary from their wages. Exempt employees must be paid a full day’s work regardless of amount of time worked that day. Although pay deductions for partial days are not allowed, leave balances may be deducted for partial day absences.
The only exception for partial work weeks is when the employee voluntarily takes time off or cannot make it into work and it is not the employer’s discretion. In that case, the employer can deduct the days of work missed during the week, as long as the employee did not work at all during those days.
- Exempt Employee unable to work for less than 1 week: Re missed days pay can be deducted against the employee’s PTO balance
- Exempt Employee unable to work for more that 1 week: Missed work time of over 1 week can be deducted from employee’s pay.
- Exempt employee voluntarily takes time off work: The employer can require that accrued PTO be used or can deduct from the employee’s wages.
Using Accrued Time for Partial Day Deductions
Under California Law, employers can require exempt employees to use accrued paid time off for partial day absences when the business closes down.
However, the Labor Commissioner also requires that employers require reasonable notice to employees if they are going to require the use of paid time off (PTO). These notices must be given a minimum of 90 days or a full fiscal quarter in advance. This means California businesses who do not have an existing policy around this cannot require the use of PTO during the 2017 wildfires.
Even so, employers could implement a policy and provide notice for future natural disasters.
Although employers can’t require that exempt employees use accrued time for partial day absences during the 2017 wildfires, they can recommend it as an option for employees.
Employers can require that exempt employees use accrued paid time off if the employee is voluntarily taking time off from work.
Paying Non-Exempt Employees During Natural Disasters
On a federal level, there are specific laws regarding when non-exempt employees are paid. Employees must be paid for all hours worked, whether those hours are worked on location or from home, even without prior approval. This becomes more likely when a natural disaster occurs and employees are not able to get to work. In addition, there are other aspects of FLSA that employers should be aware of.
First, it is also important to employers to know that employees cannot volunteer at their place of employment. This includes volunteering to clean up damage from a storm or flood waters.
Employers must also track time when an employee is “on call.” The FLSA defines employees to be on call when they cannot work, but are required to wait at their employers premises and cannot use their time as personal time. In this situation, employees must be paid for their on call time.
Employees Working From Home or Other Locations, Temporarily or Long Term
Non-exempt employees who are working from home must be compensated for time worked. Employers will need to put in place a system, like SwipeClock’s online time portal, to track employee hours. Employers are required to compensate hourly employees for all time spent working and this is vital even when the employee did not have express permission to work from home.
Employers should have a clear policy regarding those situations in which employees must work from home and communicate expectations regarding compensation table hours for hourly employees.
As stated above, exempt employees must be paid a full day’s wage for any time spent working during the day. That means that if an exempt employee works from home for only a few minutes or a couple of hours to check emails and respond to vital business operations, that employee must be paid a full day’s wage.
If the exempt employee does only work a partial day, even remotely, then the balance of the rest of the day’s pay can be pulled from the employee’s paid leave or PTO balance.
Non-Exempt Employees and California’s Reporting Time Law
In California, employers are required to pay employees partial pay when their scheduled shifts are shortened or cancelled.
Typically, the compensation pay is half of the regularly scheduled shift, but is no less than 2 hours of pay.
For example, if an employee is scheduled for an 8 hr shift and only works 2 hours, the employee would be paid regular time for 2 hours and reporting time pay of 2 hours for a total of 4 hours of pay. If the shift was scheduled to be 6 hours, then the employee would receive regular pay of 2 hours and 1 hour of reporting time pay. If an 8 hour shift was cancelled, then the employee would receive a full 4 hours of reporting time pay.
This becomes especially impactful during natural disasters.
The law provides several exceptions to reporting time pay requirements. Those expectations include any time there are threats to the employees or to the property. It also includes anytime that public utilities fail. Acts of God are also included. This includes any natural disaster such as fires, floods, earthquakes, or storms. Lastly, if the employee is scheduled for less than two hours or is on a paid standby status, then reporting time does not apply.
Reporting Time Pay only applies when the employee expected to work and the employer failed to provide work for the employee. Thus, if an employee requests to leave for personal reasons, the missed hours do not fall under reporting time.
- Threats to employees or to the facility
- When civil authorities recommend that work not continue or begin
- When public utilities fail
- An Act of God including natural disaster, flooding, fire, earthquakes and so on.
- When the employee voluntarily leaves work.
However, if an employer chooses to voluntarily close the business at their discretion must pay reporting time pay. It can be a fine line to walk for a business owner or manager to decide when to close the business if authorities have not recommended evacuation or business closure due to natural disasters. Employers must always consider the safety of their employees even if closing or cancelling shifts results in reporting time pay.
California Sick Leave Laws During a Disaster
California employers must provide paid sick leave to employees. Any employee who works in California at least 30 days and 30 hours in a year qualifies to accrue paid sick leave.
Employers can offer employees the option of using accrued paid sick leave during times when the business is closed due to a natural disaster.
However, they cannot require that non-exempt employees use sick leave during business closures. In addition, employers must also make sure to apply the same policies regarding sick leave to all the employees evenly and fairly.
Wage Delays Due to Disaster
In some cases, businesses may not be able to pay employees on the regular pay schedule due to the natural disaster. Payroll employees may not be able to process payroll, or physical equipment may be unavailable following an emergency.
California law requires that employees be paid within 7 days of the close of the applicable pay period. If, because of the natural disaster, the employer is unable to meet these requirements, then it is vital that they communicate with the employees immediately.
Employers who cannot meet the deadlines for pay due to lost records, time sheets or other issues caused by the disaster should communicate the following information with employees. 1- the last old payday, 2- the first new payday and 3-the next following payday.
It is vital that employers notify employees in writing of any changes or delays in payments.
If employers have employees in other states, then they should be aware that delaying payments could cause other employment labor fines and penalties to occur in those states.
Businesses should do the best they can to process employee payments, communicate any changes, and document the full reasons for the delay for future reference.
Let SwipeClock Help
Employers who are located in California will find that an electronic time and attendance system, like the one provided by SwipeClock, will make emergency preparedness much easier for payroll employees. Timekeeping records are automatically saved and are not at risk of destruction from the wildfires.
Furthermore, they will find it easier to comply with state and federal labor laws in issuing communications through the employee portal, automatically retaining records and storing information of-location.
That will ensure lower stress and eliminate risk factors for businesses that are worrying about other concerns during a crisis.
These employers also have to also comply with Federal Overtime Laws, the Family Medical Leave Act, California’s FMLA law, and any other national or local laws that are enacted. SwipeClock provides a comprehensive array of workforce management and time tracking tools that can help businesses to more easily stay in compliance with local and national laws.
Records are effortlessly kept for years and accrual is automatically tracked and reported to employees according to the state and city laws. Additionally, with geo-timekeeping clocks, businesses can effortlessly track time worked in specific cities to ensure compliance.
Written by Annemaria Duran. Last updated on October 12, 2017
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