Hurricane raises wage and hour issues
Unusually severe storms like Hurricane Sandy can result in unusual working arrangements that raise out-of-the-ordinary wage and hour questions.
Suppose employees volunteer to perform recovery services for employers. That may sound nice, but “the Fair Labor Standards Act (FLSA) does not permit employees to volunteer unpaid time to the employer under any but the narrowest of circumstances,” Lawrence McGoldrick, an attorney with Fisher & Phillips in Atlanta, told SHRM Online.
“For example, if a manufacturing facility sets up a hotline or makes other arrangements to provide a clearinghouse of information about the status of the workplace and employee reporting times, nonexempt employees volunteering to perform such services are engaged in compensable hours worked for FLSA purposes,” he said. Employers considering any kind of unpaid “volunteer” services by their employees should evaluate carefully and in advance the legality of this work, he said.
Emergency job duties
Sometimes, job duties change temporarily after a storm with FLSA consequences, Barry Miller, an attorney with Seyfarth Shaw in Boston, said in an Oct. 30, 2012, interview.
For example, someone who performs white-collar job duties usually may be called on to clean up. An employer changing exempt employees’ duties should consider whether the workers lose their exempt status for a pay period before regaining it once they return to exempt duties, he recommended.
Miller doubted this situation would arise in most places affected by the storm, calling it “an extreme scenario.”
He said it could come up in particularly hard hit areas, such as Atlantic City, N.J., where casinos closed because of the storm. “That never happens. There’s got to be a huge amount of ramping down and ramping up there,” he said, adding that there might be “a huge interruption” in casino employees’ usual job duties.
Another question that arises often in the aftermath of storms is whether exempt employees’ pay may be docked. The answer is counterintuitive, Miller said.
The FLSA provides an incentive for employers to remain open during storms by allowing them either to dock exempt employees’ pay for full days they miss and do not work from home when employers stay open, or to require exempt employees to use vacation, if permitted by state law. (Partial-day deductions for exempt employees aren’t allowed.)
If employers are closed for part of the FLSA workweek, but exempt employees work part of that week, the exempt workers must be paid their usual salary and docking is prohibited.
Despite these strange FLSA rules, “the last thing an employer wants is for workers to get hurt coming to work” during a severe storm, so most employers close in spite of these provisions, he added.
Reporting pay laws
Ordinarily, nonexempt employees do not have to be paid if an employer is closed and nonexempt employees are not working from home.
If an employer fails to adequately alert employees that it is going to be closed and nonexempt employees show up for work, some states require that the workers be paid something for showing up.
For example, in Massachusetts, a “reporting pay” law requires that if an employee shows up for work when there is no work to do, the employer must pay the worker for at least three hours at the minimum wage rate, Miller noted.
Similarly, in New York, there is a “call-in pay” law that requires payment for showing up for four hours or the number of hours in the regularly scheduled shift, whichever is less, at the basic minimum hourly wage. The law is something of a misnomer since it applies when employees show up, not when they merely call in.
Most states that have such laws recognize that if the employer took reasonable steps to notify employees that it is closed, it will not have to pay employees who show up for work anyway, Miller said.
He noted that when there is a lot of cleanup after an office has closed during a storm, the normal overtime rules still apply if nonexempt employees work more than 40 hours as part of the catch-up activities.
Nonexempt employees also must be paid for on-call time if they are waiting to be engaged and are not free to use time for their own purposes. For example, if an employee must be able to report to the office in 10 minutes or check e-mail every five minutes, the on-call time would be compensable, Miller remarked.
“On-call time during a storm is compensable to the same extent that on-call time is compensable under any other scenario,” said Paul DeCamp, an attorney with Jackson Lewis in Reston, Va. The central issue “is whether the time is predominantly for the benefit of the employee or the employer.”
He noted that “during severe weather events, it is common for certain key nonexempt personnel to be on call to address emergencies in areas such as physical integrity of the employer’s property and any offsite facilities, as well as information technology. The question of whether that time is compensable is very fact-specific, but the analysis focuses on the extent to which the employee’s time is interfered with by virtue of being in on-call status.”
Going beyond the law
Some employers pay nonexempt employees when the office is closed, DeCamp noted.
“Many companies view weather days and paid absences for nonexempts as an important investment in employee relations and goodwill,” he remarked. “Employers want their employees to be safe and to maintain their standard of living. In some circumstances, that may lead employers to relieve workers of having to choose between risking their own safety to come to work or perhaps not being able to pay their bills.”
Allen Smith, J.D., is manager, workplace law content, for SHRM.
©2012 SHRM. All rights reserved.
Have HR-related questions and concerns? Get access to essential forms, policies and guides, plus a live call center, at ToolkitHR.com, powered by HCN and the Society for Human Resource Management (SHRM).
Dutton to leave RONA
Robert Dutton, the president and CEO of RONA, is stepping down after 20 years at the helm of Canada’s largest home improvement retail operation. No reason was given for Dutton’s departure.
Dutton spent 35 years working for the Boucherville, Quebec-based organization, which oversees a network of more than 800 corporate, franchise and affiliate retail stores of various sizes and formats under several banners, as well as a network of 14 hardware and construction materials distribution outlets. Under his leadership, RONA expanded from a regional player with sales of C$450 million to a national corporation with more than C$4.8 billion in annual revenues.
Dutton opposed a $1.85 acquisition offer from U.S. retailer Lowe’s this summer, saying that RONA had a better strategic plan for its company. Lowe’s withdrew its unsolicited bid in September.
Earlier this week, RONA turned in disappointing third-quarter earnings of $5.1 million, down from $47.8 million in the same quarter last year. Consolidated revenues for the third quarter were fairly steady at $1.34 billion, down $10.6 million or less than 1% from the third quarter of 2011.
Dominique Boies, executive VP and chief financial officer, was appointed as acting CEO until a replacement can be found, according to the announcement. The RONA board of directors has hired Korn/Ferry International to find a successor to Dutton.