DON’T BE IN THE DARK – PAYING EMPLOYEES WHEN THE POWER GOES OUT

It is inspirational the way a community comes together in times of crisis to support each other. This week’s widespread power outages across the state of California have resulted in some amazing examples of generosity and solidarity as clients, friends, strangers, and employers work together to weather the storm.

At the same time, thousands of employers are struggling to do the right thing to support their employees as they are forced to close their doors. Employers need to familiarize themselves with the regulations surrounding payment of wages during a disaster and establish open communication with their employees to ensure there are no surprises on payday.

Nonexempt employees must receive wages for time spent at work; regardless of whether any work was actually performed or not. However, unless required by the employer, simply showing up for work during a power outage does not trigger “reporting time pay” when no work is available due to the failure in the public utilities which is beyond the employer’s control, as long as the employer does not ask employees to wait around for further instructions or to see if power is restored shortly.

Exempt employees are compensated based on the results they produce, not the hours that are worked, and generally must receive their full weekly salaries if any work is performed during the workweek. So, when a work stoppage occurs for anything less than a full workweek, exempt employees must receive their full salaries. Even in a situation where work is not available for an entire week, answering one phone call or responding to a single email constitutes work performed and negates any possible deduction from their compensation.

Although employers can typically mandate and schedule the use of vacation time for their employees, such a requirement should always be communicated in advance, never after the fact. Also, employers should weigh the cost savings of doing so against the impact on employee morale during an already difficult time. During a utility related work stoppage, we recommend that nonexempt employees be provided with the option of using vacation time vs. being unpaid for the day. For exempt employees, we generally don’t recommend mandating the use of vacation time unless the company has strong controls to ensure their exempt employees do not and cannot perform any of their work remotely (including conducting any amount of work by phone or email). After all, when the power comes back on, most exempt employees are likely to feel the necessity to make up for lost productivity once the power is restored to keep up with the workload on their plates.

Our thoughts go out to all our clients during this difficult time. Let us know if we can help shed some light on your employment law needs.