A Snowy Day and Exempt Employees’ Pay

by Richard A. Russo
Davis & Campbell L.L.C.

With winter nearly upon us, employers have begun to ask about how to deal with exempt employees (salaried employees not subject to overtime) on “snow days,” especially after last year’s “Snowmageddon.” For example, under the Fair Labor Standards Act (FLSA)…

  • Do exempt employees have to be paid their salary for days they are absent on account of their employer closing the business due to inclement weather?
  • Can an employer require exempt employees to use vacation days or paid time off (PTO) for time missed as a result of the employer closing its business due to inclement weather?

The answer to both questions appears to be “yes,” according to the United States Department of Labor (DOL) and applicable case law.

As an aside, for non-exempt employees (generally hourly employees, who are subject to overtime), an employer is not required to compensate such employees for snow days under the FLSA, because such employees are only entitled to compensation for time actually worked. However, an employer can require non-exempt employees to use PTO for snow days.

Payment of Salary When the Business Closes
Subject to limited exceptions, an exempt employee must receive their full salary for any week in which the employee performs any work without regard to the number of days or hours worked. Exempt employees need not be paid for any work week in which they do not work.

“An employee is not paid on a salary basis if deductions from the employee’s predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business. If an employee is ready, willing and able to work, deductions may not be made for time when the work is not available.” (29 C.F.R. § 541.602(a)).

Based on 29 C.F.R. § 541.602(a), the Department of Labor has taken the position that if an employer closes operations due to a weather-related situation or emergency (e.g., heavy snowfall) or other disaster for less than a full work week, “then the employer must pay an exempt employee ‘the full salary for any week in which the employee performs any work without regard to the number of days or hours worked,’ because ‘deductions may not be made for time when work is not available.’” Therefore, when an employer closes its operations for one day due to snow, the employer must pay its exempt employees their full salary for that day.

On the other hand, when an employer remains open for business during an inclement weather situation, it is the DOL’s position that the employer “may lawfully deduct one full-day’s absence from the salary of an exempt employee who does not report for work for the day due to the adverse weather conditions.” The DOL considers such absence for “personal reasons,” which is one of the limited exceptions allowing employers to deduct from an exempt employee’s salary.

However, when an exempt employee is absent for one and a half days due to adverse weather conditions and the employer remains open for business during that time, the DOL’s view is that “the employer may deduct only for the one full-day’s absence, and the employee must receive a full-day’s pay for the partial day worked, in order to meet the ‘salary basis’ rule” under 29 C.F.R. § 541.602(a).

Use of Vacation Days/PTO for Time Missed
Although an employer is not allowed to “deduct” from employees’ salaries for absences resulting from the employer’s closure of its business, it is the DOL’s position that “since employers are not required under the FLSA to provide any vacation time to employees, there is no prohibition on an employer giving vacation time and later requiring that such vacation time be taken on a specific day(s).”

Therefore, when an employer chooses to close the office due to inclement weather for less than a full work week, the DOL has determined that “a private employer may direct exempt staff to take vacation or debit their leave bank account…whether for a full or partial day’s absence, provided the employees receive in payment an amount equal to their guaranteed salary.” The United States District Court for the Central District of Illinois, which is the federal court covering Peoria, has also ruled that an employer may require employees to use PTO leave for snow days (Kennedy v. Commonwealth Edison Co., 252 F.Supp.2d 737, 742-43 (C.D. Ill. 2003)).
However, the DOL has also stated that “in the same scenario, an exempt employee who has no accrued benefits in the leave bank account or has a negative balance in the leave bank account still must receive the employee’s guaranteed salary for any absence(s) occasioned by the employer or the operating requirements of the business.”

Therefore, while an employer may deduct from its exempt employees’ salaries and require the employees to use vacation days/PTO on days that the employer’s business is closed due to inclement weather, the employer will be unable to dock the pay of any employees who have exhausted their vacation days/PTO. iBi 

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