Here in New Hampshire almost everyone is getting back on track after the devastating storm Sandy. In New York and New Jersey many people are still scrambling to get everything back together. Now the question pops up, what do we do with the pay of our employees, who were absent during and after the storm? They have been out of the office, did not produce, but also they might have lost a lot. From simple things as multiple tanks of gasoline, to a tree on the house, to the worse loss of the house or a family member or friend.
There are a couple of scenarios that might have happen and we have had a couple of question on what the company has to do, and what it can do. A lot of companies here in New Hampshire followed governor Lynch request to send employees home at 2PM on Monday November 29th. Most companies started working on Tuesday, some with a delay. Some companies were without power and had to keep the office closed. Now the question is what do you do with pay?
I will answer first the question of what you can do by following the law, then I will answer the question what in my opinion is the right thing to do.
The law – pay or not to pay
Exempt employees get paid on a salaried base. They get paid for the work they do, not for the hours they work (although you do expect at least a full time commitment). In those cases it is pretty straight forward, you almost always have to pay the whole pay period, so that means that you have to pay them for hours not worked.
Non-exempt employees who are paid by the hour get paid by the hour. When they show up for work, you need to pay them at least 2 hours, even if they work less than 2 hours.
If the office has closed for the whole day, and you did inform your employee that they did not have to come to work, you don’t have to pay them. If for a good reason, the employee did not get that message and showed up, you have to pay the two hours.
The right thing to do
What you do for your employees
But now look at what the right thing to do is.
Let say you have committed, engaged employees and the storm kicks in. They all got to work in the morning, because work needs to be done. When you send them home, whose fault is it that they cannot work anymore? It is not theirs, nor yours. Mother Nature doesn’t write out checks, so who should pay for it? And it is easy to say, employer don’t fool around pick up the tab. And yes I do agree for those couple of hours that hourly employees are missing from work.
How would you feel if you had given your employees the option to take unpaid leave, and one employee decide to stay, simply because it cannot afford to miss the income? And what if this employee gets hurt while travelling home? Do you see the Mr. Scrooge in this story? You as an employer are able to pay for those 3 hours, for your employees. You should have if the storm didn’t kick in.
But what if they have to work overtime later that week to catch up the backlog? Would it then be fair to pay for that as well? When you look at the previous example, I would say, not sure about it. You can maintain the paycheck that employees would get without the storm. When you do pay the lost hours, make sure you state that those hours do not count towards the overtime, so that you at least are not on the hook for the 1.5 time overtime rule. You can also see how many hours’ employees made and pay for the lost hours if they were not able to work the 40 hours.
When your company is financially solvent you can consider paying the overtime as a way for employees to cover the additional expenses your employees have had during the storm. Think about daycare because schools were closed, gas to power the generator, additional take-out food etc.
Conclusion: pay up to the amount that they otherwise would have gotten.
What your employees do for you
When you have those great employees, then a storm like Sandy will bring your workforce close together. You will see that employees will do a lot to keep everything rolling. When you are committed to them, they will make sure that everything is taken care off.
You can expect that an employee who is at home keeps an eye on the email and phone and helps out where needed (but keep in mind that an hourly employee needs to get paid for those ten minutes of email time). And that they are proactive in getting back to work. And you might give them slack for an hour or two late, but if they live in New Hampshire and you haven’t heard anything around noon, yes I believe you can and should ask yourself the question what is the right thing to do and not paying out another day unless they do have a really good story.
If your company was without power for a day or two, ask your employees who can work from home or the Starbucks to do so. The person, who was not able to work from home, might work a little bit longer on the following days. This way everyone gives a little, so that everyone is able to get paid a normal paycheck during the storm.
The one employee that get hurt pretty bad
You might have an employee in New York or New Jersey, and his house might be without power for more than a few days. Or even worse, the house might be completely gone. First, remember how tough it is for this employee. Employees, who go to the office, have a network at work, where they can share the emotional part of Sandy. This employee does not have that and while coping with the tragedy, they don’t have the support group that is called work. The first thing to do is making sure that you have a lot of phone contact with this employee, let colleagues call in and keep them connected. Then around now look into the situation and see how you can get the employee back to work. When an employee does not go to work, it is easy to get off track and lose the connection. You will go from bad to worse. Be firm and work together with the employee to come to a solution. Make sure you pay for the solution if needed. The following week you need to keep connected with the employee. Being in a disaster zone brings emotions to whole new level.
And again, this employee is in an extraordinary situation, so don’t be foolish not to pay for this week, just pay, support the employee and you will have the most loyal employee you have ever had.
I hope this post supports all business owners and hr manages to do the right thing! Whatever you decide to do, you do this for all employees and not only for the one that speaks up!
Feel free to leave your approach in handling this interesting situation. I am sure we all can learn from it.
Please always consult with your legal and financial counsel before implementing any discussed approaches. While this article may include some general guidance, it is not intended as, nor is it a substitute for legal or financial advice.