Employees May Not Get Paid If a Business Temporarily Closes
If a natural disaster closes doors, employers may also close wages
By Judith Stock | Reviewed by Canaan Suitt, J.D. | Last updated on January 19, 2024Use these links to jump to different sections:
- Paying Workers During Business Closures: Exempt vs. Non-Exempt Employees
- Differing Views on Fairness in Compensation During Closures
- Find an Experienced Wage Law Attorney
Most of us work for a living, and disagreements between a company and a number of employees are bound to arise, especially when a pandemic or natural disaster disrupts the marketplace.
Paying Workers During Business Closures: Exempt vs. Non-Exempt Employees
Rules vary depending on whether an employee is considered non-exempt or exempt under the law.
Non-Exempt Employees
A business has no obligation to pay non-exempt employees for hours they didn’t actually work. So, if a hurricane causes a small business to shut down for a week, that business does not have to compensate its non-exempt employees.
By the same token, a business would have to compensate its non-exempt employees for any work hours they performed during the business closure. Furthermore, employees may still be entitled to unemployment benefits during business closures, as during the COVID-19 pandemic.
Exempt Employees
When it comes to exempt employees, a business’s compensation obligations during a closure depend on whether the exempt employee puts in any work during the closure:
- If an exempt employee performs any work during a temporary closure, they are entitled to their usual compensation for that pay period;
- If an exempt employee doesn’t perform any work during the business closure, they are not entitled to their usual pay for that workweek.
Employers may also require exempt employees to use paid time off (PTO) during a temporary closure for weather events.
Differing Views on Fairness in Compensation During Closures
Allan Weitzman, former head of the labor employment practice for Proskauer Rose in Boca Raton and founder of Weitzman Mediation & Arbitration Services, believes not paying exempt employees during a closure is appropriate. He says that when a business closes for a natural disaster, income doesn’t come in, customers aren’t called, manufacturing stops, and the company makes no money. “Without additional information, paying those employees may put the business in further debt,” he says.
Jill Schwartz, founder and managing partner of Jill S. Schwartz and Associates in Winter Park, sees it differently. “If the employer is closed… due to weather emergencies, then they must pay the exempt employees their full salary, as deductions can’t be taken for time off when work is not available.”
Find an Experienced Wage Law Attorney
If you’re facing a dispute with your employer over unpaid wages, consider calling a wage and hour attorney who’s knowledgeable and experienced in federal and state laws. Learn more about medical leave requirements under the Family and Medical Leave Act (FMLA), worker’s compensation laws, or wage and hour requirements under the Fair Labor Standards Act (FLSA) as enforced by the U.S. Department of Labor.
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