Natural Disasters and the Employer’s Duty to Pay Employees

Recent natural disasters such as Hurricane Dorian and The Camp Fires in Butte County, California have left employers wondering whether they would be required to pay their employees during a temporary closure caused by a natural disaster. The answer varies depending on whether the employee is exempt from overtime (exempt employee) or subject to overtime (nonexempt employee).

For exempt employees, it generally depends on how long the natural disaster lasts.  Exempt employees usually get their full salary for any workweek in which they perform any work.  This means that if the temporary closure caused by a natural disaster is only for a partial workweek, then the exempt employee will continue to receive her full salary for that workweek.  However, the employer might be able to require the employee to use leave, if any, for the absence(s).  On the other hand, if the temporary closure is for an entire workweek (and the employee is not working remotely), then the exempt employee would not continue to receive her salary for that workweek. 

Limited exceptions exist for when an exempt employee’s salary may be reduced for full-day absences for personal reasons other than sickness or disability.  The federal Department of Labor has opined that an employee’s failure to report to work because of transportation issues during inclement weather when the office is open is an absence for personal reasons.  The position of the California Department of Labor Standards Enforcement is not clear.  Employers should exercise caution before reducing an exempt employee’s salary because they can jeopardize the employee’s exempt status by making improper salary deductions.

Different from exempt employees, non-exempt employees generally only get paid for the hours they actually work.  This means that if a natural disaster prevents non-exempt employees from reporting to work or there is no work to report for, they do not get paid.  California wage orders also contain an exemption from reporting time pay requirements for natural disasters.  Finally, employers should be aware of their own agreements or policies because employers can change the general rules for exempt and nonexempt employees through employment contracts, labor contracts and employment policies providing that the employees will be paid during temporary closures caused by a natural disaster.