Paying Non-Exempt Employees Who Work From Home

How do I pay employees that work from home?

As Employers look for ways for nonexempt and exempt employees to work remotely, one area you should review is how your inclement weather policy factors in safety and pay.

An inclement weather policy has two dimensions:

  1. The first and most important is employee safety.
  2. The second is pay.

“Employers should give serious thought to allowing employees to stay home on days when there is a significantly elevated risk of a traffic accident, as no employer wants to see an injury or fatality occur because an employee felt obligated to come to work even though the roads were not safe,” noted Paul DeCamp, an attorney with Epstein, Becker & Green in Washington, D.C., and former administrator of the U.S. Department of Labor Wage and Hour Division.

A related consideration is whether to make attendance optional for some or all employees, as well as when to discipline an employee who fails to report to work after being told to come in, DeCamp said.

In summary, “It is important for an employer to use common sense in these circumstances, based on a realistic assessment of the hazards an employee would have faced in getting to or from work,” he observed.

Noexempt (or hourly) Workers

For nonexempt employees, the matter of pay during inclement weather is straightforward, as the employer can decide whether they should come to work and the Fair Labor Standards Act (FLSA) does not require payment of wages to nonexempt workers if they don’t come in because of bad weather.

For nonexempt employees working remotely during bad weather, it may be necessary to implement makeshift timekeeping protocols when workers can’t punch in to ensure accurate recording and payment, DeCamp said. Such temporary timekeeping practices might be as simple as having the employee record the time when work starts and stops in a notebook.

In addition, employers may want to provide clear guidance about how much time nonexempt employees may spend working remotely during inclement weather, he said. That way, employees who normally work six to eight hours a day will not surprise an employer by reporting that they worked more hours from home. 

Simply stated, employers should ensure that they comply with the state and local wage and hour laws. However, exceptions may apply if workers are sent home during an emergency situation, such as a power outage or a disruption by an “act of God.”

Exempt (or salary) Employees

If an employer closes for only a portion of a workweek, exempt employees are entitled to their full salary for the entire workweek, noted Robert Hingula, an attorney with Polsinelli in Kansas City, MO.

Vacation or paid time off (PTO) may be charged to an exempt employee, but if the employee has exhausted his or her leave balance, the worker must be paid a full salary during a partial week closure, Suflas and Thomas observed.

Keep morale in mind when deciding on closures and pay, Hingula said. For example, if the employer requires that employees use PTO for a closure, and the weather isn’t as bad as expected such that the company could have stayed open, employees may be upset that they had to use PTO on a day they could have reported to work, he noted.

Failure to pay exempt employees on a salary basis during partial-week closings or when they work remotely for at least some time during full-week closures may jeopardize their FLSA-exempt status, Suflas and Thomas cautioned. So, too, might docking pay for early dismissals. If exempt employees do not work during full-week closures, the FLSA does not require them to be paid but available PTO may be applied, they noted.

Inclement Weather Policy

A company’s inclement weather policy should address:

  • How far in advance the company will notify employees of a closing.
  • How employees will be notified, such as whether they are to call a hotline or receive a text.
  • If and how workers will be compensated during the closing.
  • Whether employees may use PTO during the closing.
  • The steps an employee must take to inform an employer of delays or the inability to come into work, or the need to leave early.