The 2018 hurricane season saw a number of powerful storms wreak havoc on the Gulf Coast and eastern seaboard. Now that winter is here, storms with plenty of wind and snow have the capacity to cripple cities across the Midwest and Northeast. All these weather events can negatively impact payroll.
BenefitMall, a Dallas company specializing in payroll and benefits administration, explains that payroll can be a tricky proposition even under ideal conditions. They say that inclement weather capable of shutting down businesses for days at a time only makes running payroll more complicated.
So, how can inclement weather affect payroll? Keep reading to learn more.
1. Paying Non-Exempt Workers
Federal regulations require employers to pay all their non-exempt workers for every hour worked. That is simple enough. But what are the requirements when inclement weather forces a business to shut down? That depends on a number of factors.
Non-exempt workers must still be compensated for every hour they actually work. So if an employee shows up and works for a few hours before being sent home due to the weather, he or she must still be paid for the hours worked that day.
Some states take this principle further. They mandate a minimum number of hours that employees must be paid if they show up for work before being sent home.
2. Non-Exempt Workers and PTO
Federal law allows employers to require their non-exempt employees use existing paid time off (PTO) to cover lost hours due to inclement weather – if those employees want to be paid for the time missed. However, some states do not allow such mandates. Due to the nature of how our government system works, state laws prohibiting employers from requiring the use of PTO supersede federal regulations.
All this boils down to a simpler point: the law does not prevent employees from using their PTO to cover time missed due to inclement weather. If an employee wants to claim his or her paid vacation or sick time after weather shuts down the business, he or she can legally do so.
3. Paying Exempt Workers
Because exempt employees are not subjected to a particular work schedule with controlled hours, federal law requires that they be paid their full salary for any week they actually work, regardless of the number of hours they put in. As such, exempt employees are paid their full salary even during inclement weather shutdowns as long as at least some work was done in the same week.
In the event inclement weather shuts down a business for an entire week, thereby preventing exempt employees from doing any work, the same rules regarding PTO apply. Workers can use their PTO to cover lost time.
4. Preventing Paycheck Distribution
Inclement weather can be problematic for paycheck distribution among companies that do not utilize direct deposit. After all, it is hard to distribute checks when a business is closed. Fortunately, the vast majority of U.S. employers do offer direct deposit as an option. If your company isn’t one of them, 2019 would be a good year to implement a direct deposit program.
Combining direct deposit with outsourced payroll virtually guarantees employees will be paid even if inclement weather temporarily shuts down a business. Unlike paper checks, direct deposits occur online and automatically, regardless of the weather.
There are other things to consider when inclement weather impacts payroll. However, the biggest thing to remember is that weather events do not mitigate the responsibilities employers have under the law. Both federal and state laws still must be complied with no matter what the weather does.