In the midst of raging wildfires in Northern California and the aftermath of hurricanes Laura and Marco in the Gulf states, many employers are wondering how to respond and what happens next, particularly where employers have already taken measures in response to COVID-19. After the waters and fires subside, employers will face a host of legal and practical issues across multiple jurisdictions. This article details some of the many employment questions that may arise in the near term and highlights key considerations in the impacted jurisdictions.
Wage and Hour Issues
There are several payroll-related concerns that can be triggered by an emergency situation.1 We start with a refresher on who must get paid when operations are shuttered due to weather:
Non-Exempt Employees. Under the Fair Labor Standards Act (FLSA), non-exempt workers must be paid only for the time they work. As a result, employers need not compensate non-exempt employees who are not working because of a storm or other natural disaster. Notably, it does not matter whether the absence is based on the employer's decision to close a worksite or the employee's decision to stay home (or evacuate). If the worksite is open, but the employee decides to stay home or to leave a shift early, the non-exempt employee does not need to be paid for the hours missed. Similarly, if the employer is operational, but a remote-work employee loses power, the non-exempt employee need not be paid during such time.
There may be exceptions during a weather event for waiting time, or on-call time. The FLSA considers employees to be "on call" if they must remain on the employer's premises and are unable to use their time for their own purposes.2 Thus, for example, employees whose homes or work location have lost power, and are required to remain at a location in case power returns, should be paid for the time spent holding down the fort despite their inactivity. Moreover, California also obligates employers to compensate employees who are subject to the control of the employer, even if the employees are not required to remain on the premises.3
An additional consideration specific to California is the potential obligation to pay reporting time pay. California wage and hour law requires that employees who report to work on a scheduled work day, but who are not utilized or are given less than half of their usual or scheduled day's work, be paid for half of that usual or scheduled day's work at their regular rate of pay. However, reporting time pay requirements do not apply in certain emergency situations including if: (1) civil authorities recommend closure of the workplace; or (2) the disruption is caused by an act of God or is otherwise outside the employer's control. As a result, California employers electing to close early as a direct result of fires should be careful to articulate their reasoning to employees.
A further wage and hour consideration for California employers is that split shift premiums may apply if workers are asked to work split shifts during this uncertain time. With minimal exception, a California employee working a split shift must be paid an amount that is at least equal to the minimum wage for the hours worked in a day, plus one hour. Whether an employee is entitled to a split shift premium depends on the number of hours worked and the employee's regular rate of pay.
Exempt Employees. When an employer shuts down its operations because of adverse weather conditions for less than a full workweek, exempt employees must be paid their full salary.4 This rule also applies if exempt employees work only part of a day. Thus, if an employer decides to send staff home early due to deteriorating conditions, it may not dock exempt employees' pay. Indeed, if an employer deducts from the employee's salary in this situation, it risks losing the exemption applicable to that employee. What is more, these same considerations apply to remote-work employees: where an employer shuts down operations because of adverse weather, or where a remote-work employee loses power, exempt employees must nevertheless be paid their full salary if the shutdown is for less than a full workweek.
Nonetheless, and barring any state law or restrictive company policy to the contrary, exempt employees may be required to use accrued leave or vacation time (in full or partial days) for their absences. Such a move may be unpopular, but an employer can direct exempt employees to take paid time off for the shutdown, pursuant to the employer's bona fide paid leave or vacation policy. On the contrary, if an employee does not earn, or does not have any available paid leave or vacation time, the employee is still entitled to their full guaranteed salary if the employer decides to close due to weather.5 Employers must therefore balance the potential personnel issues that may arise if some employees are required to use accrued paid leave or vacation time, where others are not.
If an employer is open for business, on the other hand, an exempt employee who elects to stay home (or, in the case of a remote-work employee, to not work) due to the weather situation is considered absent for personal reasons. There, an employer with a bona fide paid leave or vacation policy may require the employee to use their accrued paid time off to cover the absence.6 As long as it is permitted by state law, paid leave or vacation time in this circumstance may be taken in full or partial days.
If an employer does have a leave policy, but the non-working employee does not have a paid leave account balance, the employer has no obligation to pay the employee. The employer can place the employee on unpaid leave for the full day(s) that the employee failed to report to work for personal reasons. Employers should bear in mind that salary deductions for less than a full day's absence are not permitted, even though leave balance deductions are allowed for partial-day absences. As a result, if an exempt employee with no paid leave balance misses half a day, the employer must pay that employee their salary for the entire day, with no partial deduction for the absence. Meanwhile, an employee with a paid leave balance in the same scenario could be required to use half a day of paid time off to cover the absence.
Remote Work. Employers should consider how to legally and practically address situations where employees work from home, whether in the relatively long-term due to COVID-19, or as a short-term solution due to a natural disaster. As noted earlier, non-exempt employees must be compensated for all time spent working. Accordingly, employers must pay non-exempt employees for performing any work remotely, even if the employee did not have express permission to work from home. Employers, moreover, may need to rely on employees to self-report hours worked in such a scenario. To help minimize the risk of wage and hour violations for employees who are working from home, employers should implement, communicate and strictly enforce a time and attendance policy that clearly explains what constitutes compensable time and requires employees to accurately record all time worked. Exempt employees must likewise be paid their regular salary in this situation. Even if an exempt employee spends only a few minutes working remotely, the employee must be paid the usual salary for the day and the workweek. In instances where a partial day is worked, the exempt employee can be directed to use appropriate paid leave time for the balance of the time, as discussed above.
COVID-19 has transformed the workplace across the globe with much of the corporate workforce moving to remote work on a full-time basis. Some workforces are indefinitely continuing to operate with a remote workforce, particularly in those jurisdictions—including many across California—where local orders encourage remote work wherever possible. In light of the uncertainties of COVID-19, coupled with the impact of multiple natural disasters, a comprehensive remote work place is highly recommended for employers.
Delay in Wage Payments? One possible consequence of natural disasters like wildfires and hurricanes Laura and Marco is the delayed processing of employees' wage payments. Texas law generally requires payment of wages twice a month for non-exempt employees and at least once a month for FLSA-exempt employees.7 Whereas in Louisiana, payment of wages must be made no less than twice a month for employees who are nonexempt under the FLSA in certain occupations, such as manufacturing and oil and mining operations.8 Louisiana law further mandates that employers notify employees of any changes in the method and frequency in which they will be paid.9 Contrast this with California wage payment requirements, where the general rule requires payment of wages at least twice during each calendar month, with labor performed between the 1st and 15th day of the month paid between the 16th and the 26th day, and labor performed between the 16th and the last day of the month paid between the 1st and 10th day of the following month. Alternatively, employees may pay be paid weekly, biweekly, or semimonthly if the wages are paid not more than seven calendar days following the close of the payroll period.10
Employers that have not already made pandemic-related adjustments to the way wage payments are managed may be unable to process or fund payments to satisfy pay requirements, especially in the immediate wake of a storm or wildfire. For example, California law requires employers to give written notice to employees, within seven calendar days of changes in the event that an employer needs to change the payday schedule.11 The Texas Workforce Commission has advised that, should an employer need to change the designated payday, "it would be best to give employees advance written notice thereof setting out the next three paydays – 1) the last old payday; 2) the first new payday; and 3) the next-following new payday."12 Consistent with this suggestion, and as a courtesy, employers should inform employees of any wage payment processing problems and advise them of when they can expect payment. Notice should be made in writing, as soon as practicable, and is warranted particularly where employees are on direct deposit and might otherwise write checks against anticipated deposits. Indeed, open and ongoing communication with employees about wages, scheduling, and related matters is highly recommended throughout any recovery period.
Although lenience may be afforded to those who experience significant difficulty meeting these types of obligations as a result of unfolding disasters, Texas, Louisiana, or California have not articulated that there may be any relief or waiver of the normal wage payment laws in light of hurricanes Laura and Marco or the fires in Northern California. Furthermore, if payroll is processed in Texas or Louisiana for employees working in other states, it is important to be mindful of other state laws and potential penalties for delayed payment. For example, if the timely payment of wages to employees in California is compromised, an employer may be subject to monetary penalties under the California Labor Code. Employers that cannot meet payroll obligations must simply do their best to notify employees as stated above, keep records of the reasons for the delay, and make arrangements to pay employees as promptly as possible.
Voluntary Payments or Advances in Paychecks. Of course, with the expectation that hurricanes Laura and Marco may take a significant toll and the ongoing impact of the California wildfires, employers with sufficient ability might consider paying wages (full or partial) for a set duration, even where not required. This extra step could help plug the gap until any government assistance kicks in and might be particularly appropriate in hardest-hit locations, where employees may have lost everything. It can also obviously boost morale, demonstrate loyalty, and enhance the employer's reputation and culture. It is important to be mindful to properly document any pay advancements to avoid any future questions of deductions in future wages that may result from any advancements. The voluntary payment of wages (whether full or partial payments), should be reported and treated as wages for purposes of tax treatment.
Impact of a State of Emergency?
As employers have learned all too well during the pandemic, an employer's legal duties generally do not officially change if the government announces a state of emergency.13
Further, Texas has a special statute protecting employees who evacuate pursuant to a governmental order.14 In Texas, employers may not discharge or otherwise discriminate against an employee who "leaves the employee's place of employment to participate in a general public evacuation ordered under an emergency evacuation order."15 The definition of an emergency evacuation order includes an official statement issued by a governmental entity to "recommend the evacuation of all or part of the population of an area stricken or threatened with a disaster."16 The statute creates liability for the loss of wages or benefits (e.g., vacation pay) incurred by the employee as a result of the violation.17 There is an exemption for emergency services personnel (police, firefighters, EMTs, or those whose employment involves providing "services for the benefit of the general public during emergency situations") if the employer provides adequate emergency shelter.18
The Texas statute appears to be limited to an employee who leaves work for an evacuation, yet prudent employers will treat employees who did not report to work because of any evacuation in the same way. The statute can be interpreted to cover voluntary as well as mandatory evacuations because it refers to official statements recommending evacuation. And as a practical matter, it may not be clear why an employee missed work, such that an employer may need to ask the reason for the absence. Additionally, the law does not define which government officials may issue a covered emergency evacuation order, and orders by mayors of small towns or minor county government officials could fall within the reach of the statute, particularly in light of the fact that in Texas, mayors and county judges are responsible for emergency preparedness and response within their local jurisdictions. As a result, it is possible that employers may have no knowledge of evacuation orders affecting some of their employees in smaller jurisdictions. Given the ambiguities in the law, an employer should be cautious in terminating or disciplining an employee who missed work during an evacuation associated with hurricanes Laura and Marco, absent specific information provided by the employee that the absence was not because of the evacuation.
Leaves of Absence and Reasonable Accommodations
Employers should bear in mind that employees may be entitled to use leave time, or require reasonable accommodations, to deal with any lingering ramifications of natural disasters.
For example, employees who have suffered a serious injury or illness—or who have a family member who did—may be entitled to leave under the federal Family and Medical Leave Act (FMLA) or a state equivalent law, such as the California Family Rights Act. State or local law may also apply to certain employees, particularly in California where state and local paid sick leave laws provide employees mandatory paid sick time off.19 Even if not covered by federal, state, or local laws providing for time off for illness, an employee may qualify for sick or other leave under a company policy or collective bargaining agreement. As such, it is important to remind front-line managers and supervisors of governing policies on this subject and their possible application during this time period.
Employers should be aware that employees absent from work to assist with relief efforts may separately qualify for protected time off. Under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which effectively applies to every public and private employer and has no minimum employee requirement, employees may take a leave of absence for service in the uniformed services. For purposes of disaster relief, "uniformed services" include specified service by members of the National Disaster Medical System, appointment of a "System member" of the National Urban Search and Rescue Response System20 into federal service under section 327 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act,21 the National Guard if called by the President of the United States, and any other category of persons designated by the president during a time of national emergency.22 Service in the National Guard for a unit activated by a state governor, rather than the president, and work for the Federal Emergency Management Agency generally is not be considered part of the uniformed services under USERRA.
Under Louisiana law, employees may qualify for leave when they are called to duty as a volunteer first responder pursuant to an operations plan developed by the state Office of Homeland Security and Emergency Preparedness. Qualifying "first responders" include medical personnel, emergency and medical technicians, volunteer firefighters, auxiliary law enforcement officers and members of the Civil Air Patrol. While such leave is unpaid, employees may use accrued vacation or sick leave, and deductions from exempt employees' pay must conform to the principles outlined above.23
Additionally, California protects employees who serve as volunteer emergency responders and are called into action during a natural disaster.24 Specifically, California employers may not discharge or otherwise discriminate against employees who take a temporary leave of absence to respond to an emergency in their roles as volunteer firefighters, emergency rescue personnel, or reserve peace officers. This leave may be unpaid and with the exception of certain health care workers, the law does not require advance notice.
When faced with employee requests to take time off to assist with relief and rescue efforts, employers should take care to confirm whether the requested relief is related to uniformed services or volunteer first responder duties so that they can appropriately determine employees' leave and reinstatement rights.
Even if applicable leave laws and employer policies and practices do not provide for non-medical leaves of absence, the circumstances of a natural disaster will probably present extraordinary circumstances that may motivate an employer to grant the time off to employees directly or indirectly affected by the disaster. While strict adherence to leave policies is the conservative and prudent management approach for employers in normal operating circumstances, when a disaster strikes employers should be flexible and considerate by expanding or at least temporarily relaxing otherwise restrictive existing leave policies. In making exceptions, employers must remain mindful of state and federal antidiscrimination laws, and ensure that such exceptions are based on legitimate, non-discriminatory reasons and are consistently applied across the workforce. Inconsistent application of workplace rules and policies are often relied upon by employees raising claims of discrimination. To avoid confusion with expanded COVID-19 leave laws and/or company policies, employers should be careful to communicate the reasons and limitations of expanded leave offered in response to the recent wildfires and/or hurricanes.
Employers should also be prepared to handle employee requests for accommodation. The Americans with Disabilities Act (applicable to employers with 20+ employees) and related state and local antidiscrimination laws require employers to provide reasonable accommodations to qualified employees with disabilities. Because employees who are physically or emotionally (e.g., post-traumatic stress disorder) injured by the impact of a natural disaster may be entitled to reasonable accommodation, employers should take all such inquiries seriously.
Employees who are displaced from their positions due to natural disasters may be eligible for unemployment compensation from the Texas Workforce Commission25 or the Louisiana Workforce Commission.26 State unemployment benefits typically run for 26 weeks. The government sometimes has the authority, however, to extend those time limits.
On August 22, 2020, California Governor Gavin Newsom announced that the White House approved California's request for a Presidential Major Disaster Declaration to bolster the state's emergency response to wildfires burning in Northern California and support impacted residents in Lake, Napa, San Mateo, Santa Cruz, Solano, Sonoma and Yolo counties. As such, the one-week waiting period for unemployment benefits has been waived for California unemployment benefit claims filed between August 14, 2020 and February 14, 2021 and employers have a 60-day extension to file state payroll reports and make payroll contributions. Moreover, should President Trump issue a disaster declaration for hurricanes Laura or Marco, unemployment benefits could be offered to workers who lose their jobs as a result, but do not qualify for state benefits, such as self-employed individuals. If after filing for state unemployment compensation an employee is ineligible for state assistance, the employee may be eligible for Disaster Unemployment Assistance (DUA). This federally-funded program is made available for individuals who live or work in counties made the subject of a disaster declaration. Employees must file for regular unemployment compensation benefits before filing for DUA, and if the employee is ineligible for standard state unemployment compensation, the employee then may receive DUA.27 Employers should consider informing employees about eligibility for these programs if the employer cannot provide work for employees as a result of the storm.
Relatedly, employers that decide to close one or more facilities or operating units, or implement a mass layoff, must evaluate whether notice will be required under the federal Worker Adjustment and Retraining Notification Act (WARN).28 While neither Texas nor Louisiana, has a state-law equivalent to WARN, California does have its own "mini-WARN" law, known as CAL-WARN, which is broader than the federal version.30
Briefly, the WARN Act requires a covered employer (100 or more employees) to give 60 days' notice prior to a plant closing or mass layoff. A plant closing occurs when a facility is permanently or temporarily closed and 50 or more full-time employees suffer a job loss during any 90-day period (sometimes shortened to 30 days). A mass layoff occurs when either of the following suffer a job loss during any 90-day period (sometimes shortened to 30 days): (a) 500 or more "full-time" employees (as oddly defined by the statute) at a single site of employment; or (b) 50 or more full-time employees at a single site of employment constituting at least 33% of the active full-time workforce.31 A job loss includes a layoff of longer than six months. When required, WARN notice must be provided to affected nonunion employees, the representatives of affected unionized employees, the state's dislocated worker unit, and the local government where the closing or layoff is to occur.32
Under Cal-WARN, a covered establishment is any commercial or industrial facility that employs 75 or more employees. Notice is triggered upon: (1) a mass layoff (a separation of 50 or more employees during a 30-day period); (2) a relocation (the removal of all or substantially all of the employer's operations to another location at least 100 miles away); or (3) a termination (the entire or substantial cessation of the employer's operations).
When required, employers must provide written notice to affected employees, the EDD, the local workforce investment board, and the chief elected official of each city and county government where the triggering event is occurring. This notice must be provided 60 days in advance of the layoff, relocation, or termination event.33
While WARN provides some leeway in the case of a natural disaster34 the exception is quite limited. Employers may give shortened (or in some cases retroactive) notice if the disaster was a direct cause of the job losses, and may be able to rely on the "unforeseeable business circumstances" exception to given shortened notice if the disaster was an indirect cause. Nonetheless, employers are not relieved completely of their WARN notice obligations. They must give "as much notice as is practicable," the notice must include all usual elements of a WARN notice, and they must also state why they were unable to give notice earlier.35 Employers that have implemented permanent or temporary layoffs or hours reductions within the last 90 days due to the pandemic or other reasons should be careful to consider whether those job losses must be included when calculating total job losses for the purposes of evaluating WARN obligations.
Qualified Disaster Payments
As many employers have learned during the pandemic, the Internal Revenue Code section 139 provides that an employer may make payments to its employees that constitute "qualified disaster relief payments" without any income or payroll tax consequences. "A qualified disaster relief payment" means any amount paid to, or for the benefit of, an individual to reimburse or pay reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a "qualified disaster," or to reimburse or pay reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence or repair or replacement of its contents to the extent that the need for such repair, rehabilitation, or replacement is attributable to a qualified disaster. Note that this exclusion is applicable to the extent the employee's disaster-related expense has not been compensated for by insurance or otherwise.
A "qualified disaster" is generally one that is declared by the President of the United States. Hurricanes Katrina, Rita and Wilma were all presidentially declared "qualified disasters" within certain affected areas. Likewise, the COVID-19 pandemic is also a "qualified disaster," thus allowing employers to offer their employees "qualified disaster relief payments" in connection with COVID-19. Should a similar declaration be made for the wildfires or hurricanes Laura or Marco, employers may make payments to their employees to help them with living or personal expenses or repairing their homes without having to withhold or pay income and payroll taxes. While these payments need not be reported or disclosed by employers or employees, and are not subject to federal tax withholding obligations, such payments could, however, remain subject to state and other non-federal taxation.
Employers have many issues to consider in tackling a response to employees impacted by wildfires or hurricanes, including balancing the needs and morale of a workforce that have already been significantly impacted by the COVID-19 pandemic with continuing to do business. In addition to the topics highlighted herein, employers may need to consider critical issues related to employee assistance programs, property and casualty claims, workers' compensation inquiries, benefits continuation options, and tax reporting duties—all on top of basic operational needs in the midst of the uncertainties of the pandemic. We remain ready to answer any questions and help however we can.
1 Specific agreements between employers and employees also might be relevant to this topic, along with applicable workplace policies or collective bargaining agreements, which may vary the considerations for a specific employer.
2 See, e.g., 29 C.F.R. §§ 785.14, 785.15, 785.17.
3 Mendiola v. CPS Sec. Solutions, Inc. 60 Cal.4th 833 (2015).
4 29 C.F.R. § 541.602(a) (explaining that deductions may not be made when work is unavailable at the employer's instruction); see U.S. Dep't of Labor, Wage and Hour Div., Opinion Letter FLSA2005-46 (Oct. 28, 2005) (stating that exempt employees must be paid when "the employer closes operations due to a weather-related emergency or other disaster for less than a full workweek"); U.S. Dep't of Labor, Wage and Hour Div., Opinion Letter FLSA2005-41 (Oct. 24, 2005).
5 If state law and the company's policy permits, an employer theoretically could allow an employee to carry a negative vacation balance and then recoup the time later. This approach can become complicated, however, particularly if the employee separates before eliminating the negative leave balance.
6 It is important to be mindful of paid sick leave obligations in certain jurisdictions, including, but not limited to, California.
7 Tex. Lab. Code §§ 61.011-013. Louisiana's wage frequency law similarly does not apply to FLSA-exempt employees. In Louisiana, an employer generally may pay its employees on a monthly or semi-monthly basis so long as the employer designates the pay schedule in advance. Special rules apply for certain industries. La. Stat. § 23:633.
8 LA Stat. § 23:633 (entities with fewer than ten employees are exempt from this requirement). Failure to comply with Section 23:633 may result in a fine of not less than $25.00, but not more than $250.00 for each day's violation.
10 Cal. Lab. Code § 204.
11 Cal. Lab. Code § 2810.5.
12 Texas Workforce Comm'n, Especially for Texas Employers: Frequency of Pay.
13 See Kim Rives Miers & Lauren Timmons, Inclement Weather FAQs: Who Gets Pay for a Snow Day?, Littler Insight (Jan. 19, 2017) (noting that a few jurisdictions offer protections to employees who miss work during a state of emergency).
14 See Kerry E. Notestine, The Texas State Statute Prohibiting Discrimination Because of an Evacuation, Littler Insight (Sept. 17, 2008).
15 Tex. Lab. Code § 22.002.
16 Id. at § 22.001(2) (emphasis added).
17 Id. at § 22.003.
18 Id. at § 22.004.
19 This patchwork of local leave ordinance has picked up speed during 2020 as a direct result of the COVID-19 pandemic. See Michelle Barret Falconer and Sebastian Chilco, Sonoma County, California Enacts Emergency Paid Sick Leave Ordinance, Littler Insight (August 20, 2020).
20 The National Urban Search and Rescue Response System was established under the authority of the Federal Emergency Management Agency to organize federal, state and local emergency response teams into integrated federal disaster response task forces.
21 38 U.S.C. § 4303(13).
22 As of this publication, while President Trump has made an emergency determination in response to COVID-19, he has not yet designated any such category of persons. No such determination has been made for hurricanes Laura or Marco.
23 La. Stat. § 23:1017.1, et seq.
24 Cal. Lab. Code §§ 230.3, 230.4.
25 The Texas Workforce Commission takes the position that a "[f]ailure to come into work on a day when authorities have closed area roads and are recommending against travel will likely not be considered disqualifying misconduct in an unemployment claim. An employer would have the burden of proving that the employee really could have come to work, despite the inclement weather conditions." Texas Workforce Comm'n, Especially for Texas Employers: Bad Weather – Pay and Attendance Issues.
26 For general information on unemployment benefits in Texas, visit the Texas Workforce Commission's website. Information about benefits available in Louisiana is available at the Louisiana Workforce Commission's website.
27 Dep't of Homeland Security, Federal Emergency Mgmt. Agency, Federal Aid Programs for the State of Texas (Aug. 25, 2017).
28 See, e.g., Bruce Millman & Daniel Thieme, WARN Notice – One More Burden for Employers Recovering from Sandy?, Littler Insight (Nov. 27, 2012).
29 Notwithstanding the above, notice may be required or recommended to a state agency in the event of a mass separation, for unemployment purposes. See, e.g., La. Admin. Code tit. 40, § 323.
30 Cal. Lab. Code §§ 1400, 1401.
31 29 U.S.C. § 2101(1)-(3). A "facility" includes an operating unit within a facility.
32 20 C.F.R. §§ 639.4, 639.6.
33 For a further discussion of the interplay between WARN Notice and COVID-19, See Kerry Notestine and Daniel Thieme, Furloughs and Other Temporary Responses to Coronavirus (COVID-19) Disruptions, Littler Insight (Mar. 11, 2020).
34 In California in the event of physical calamity.
35 See, e.g., 29 U.S.C. § 2102(b); 20 C.F.R. §§ 639.7, 639.9.
Originally published by Littler Mendelson, August 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.