Are your employees out singing “Do you want to build a snowman?” while you are paying them? This past Monday, like every other February 2, America briefly paid attention to a groundhog named Punxsutawney Phil and his much-anticipated weather prediction.

According to legend, since Phil saw his shadow, we should plan for six more weeks of winter weather ahead. While schools close when the first snowflake falls, businesses have to make tough choices about whether or not to stay open during inclement weather.

The decision to close business operations for even part of a day brings numerous human resources challenges for any employer. Among other issues, when a business closes due to winter weather, it must follow the guidelines of the Fair Labor Standards Act (FLSA) to determine how to compensate its employees while the business is closed.

For non-exempt employees, who are paid hourly (the majority of most workforces), an employer compensates the employee only for each hour worked. For example, if a business closes because of inclement weather at noon, it would only pay an employee for the hours that he or she actually worked instead of the entire scheduled workday. If a business closes for an extended period, from a single day to multiple weeks, the employer is under no obligation to compensate a non-exempt employee during the period when he or she is not performing work.

Another issue to consider is how liberally you will allow use of leave for non-exempt employees to cover these periods of time. It is not uncommon for employers to adopt liberal leave policies during inclement weather events.

The FLSA treats salaried exempt employees differently. Exempt employees are generally paid on a salary basis and are not entitled to overtime pay. In the event of a “snow day” or any other reason that prevents the business from opening (i.e., fire or loss of power), an employer must pay the employee for any day in which he or she is “ready, willing and able to work.”This means that even if the business must close an office for an entire day, it must still pay all of its exempt employees for that day—regardless of the fact that the business was closed and the employee performed no work. Thus, if an exempt employee works any part of that work week, the employer must pay the exempt employee for that entire workweek.  Consider, however, the scenario where a business has to close for an entire workweek, the business does not have to pay an exempt employee for that workweek if he or she does not perform any work during that week.

Keep in mind if employees can—and do—work from a remote location they must be paid. However, if a business decides to remain open during inclement weather and the weather prevents an employee from coming to work, the employer might be able to deduct the missed time from the employees accrued leave time. Employers have some flexibility in how they require use of leave in these situations, so look at your past practices or policies or call on us for more information in that regard. The state in which your business operates may have an impact on that answer.

For a workplace with exempt employees who are able to work from home, it is a good idea to plan for telework policies in the event of inclement weather or other business interruption. A bad winter storm does not have to shut down productivity completely.

OLAF  (from “Frozen”) and Punxsutawney Phil are not the only ones watching the weather forecasts, stay ahead of the game by thinking about what your company would do. Always call on Woods Rogers for counsel on these and other issues that can impact your workforce.