Wage and Hour Laws in the Wake of a Natural Disaster

Whether it’s an earthquake, blizzard, bush fire or hurricane, sometimes Mother Nature unexpectedly interrupts the flow of the work week.   As government officials and disaster recovery experts encourage workers to stay home, companies are left to determine if and how employees will be compensated when a company or project is shut down, during and immediately following a natural disaster. 

A 2010 Fact Sheet published by the U.S. Department of Labor’s (DOL) Wage and Hour Division provides guidance to employers regarding compensation during natural disasters and recovery.  The guidance explains that employers are only required to pay covered, non-exempt employees “no less than the federal minimum wage for each hour actually worked and overtime at one and one-half times an employee’s regular rate of pay for all hours actually worked in excess of 40 in a week.”  It further explains that “these requirements are not subject to waiver during natural disasters and recovery efforts.”  So, while some employers choose to pay non-exempt workers for the time the company is closed, the company is not required to do so. The guidance also answers five additional questions that employers may face during a natural disaster such as:

1. How do employees receive their last paycheck, and how soon must they be paid if they worked the week prior to the disaster and the employer is now closed?
2. How many hours is an employer obligated to pay an hourly-paid employee who works a partial week because the employer’s business closed as a result of the disaster?
3. Can workers receive unemployment compensation while they are out of work?
4. If individuals volunteer services to a public agency, are they entitled to compensation? and
5. If individuals volunteer services to a private, not-for-profit organization, are they entitled to compensation?

Although not listed in the guidance document, the FLSA rules are a little different for exempt employees, those who are paid on a salary basis and meet other tests exempting them from  overtime pay.  According to DOL Fact Sheet #17G, “an exempt employee must receive the full salary for any week in which the employee performs any work, regardless of the number of days or hours worked,” unless no work is performed for the entire workweek.  Employers should exercise additional precautions with regard to state laws that may require compensation for being “on-call” or being turned away after reporting to work, among other things. For more information on the FLSA, visit DOL’s website.  Additional information may be found on AGC’s Labor and HR Topical Resources webpage. The primary category is “Compensation” and the secondary category is “Fair Labor Standards Act.”