Legal Updates

Commuting in a Winter Wonderland: DOL Issues Opinions On Salary Deductions For Weather-Related Absences And Closures

The United States Department of Labor’s (“DOL”) Wage and Hour Division recently released two Opinion Letters offering guidance to employers on permissible salary deductions from an exempt employee’s salary for weather-related absences and closures.  In short, if an employer closes its office(s) due to inclement weather, the employer may deduct an employee’s time out of work from vacation or other leave banks but may not deduct from an exempt employee’s salary, while if the employee chooses not to come to work for one (1) or more full days due to inclement weather, the employer may deduct from an exempt employee’s salary or from the employee’s vacation or other leave bank.

DOL regulations generally require that “an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked.  An employee is not paid on a salary basis if deductions from the employee’s predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business.  If an employee is ready, willing and able to work, deductions may not be made for time when work is not available.”  29 C.F.R. § 541.602(a).  An exception to this general rule may be made “when an employee is absent from work for one or more full days for personal reasons, other than sickness or disability.”  29 C.F.R. § 541.602(b)(1) (emphasis added).

In the first Opinion Letter, the DOL addressed the following three questions:

• During office closures due to inclement weather, may a private employer direct exempt staff to take vacation (or other leave) or leave without pay without jeopardizing the employees’ exempt status?
• If the private employer’s offices remain open during inclement weather, can exempt staff who fail to report to work be directed to take vacation (or other leave) or leave without pay without jeopardizing the employees’ exempt status?
• If an exempt employee chooses to stay home for half a day due to inclement weather, may a private employer choose not to pay the exempt employee for time not worked if the employee is probationary or has exhausted all accrued vacation (or other leave bank time)?

In response to the first question, the DOL stated that if an employer closes its

office(s) due to inclement weather for less than one (1) full week, the employer must pay exempt employees their full salary for that week.  However, if the employer maintains a bona fide leave plan, the employer may deduct the time out of work due to the office closure from vacation or other leave banks without jeopardizing the employees’ exempt status, so long as the employees “receive in payment an amount equal to their guaranteed salary.”  If, however, an employee has no accrued vacation or leave time available, the employee must still be paid his/her full salary for such absences from work.

In response to the second and third questions, a different outcome is reached if the employer’s offices remain open, but the employee chooses not to come to work for one (1) or more full days due to inclement weather.  Under these circumstances, the DOL concluded that such absences due to inclement weather constitute absences for personal reasons.  Therefore, the employer may properly make deductions from the employee’s salary without jeopardizing the employee’s exempt status for that week or the employer may require an exempt employee to take vacation or other leave.  If an exempt employee has no accrued vacation or other leave time, the employee does not have to be paid if he/she chooses not to report to work for one (1) or more full days due to inclement weather.  However, an employer may not make deductions from an exempt employee’s salary for less than a full day’s absence under these circumstances.

In the second Opinion Letter, the DOL responded to a healthcare organization’s concern that its specialized absence policy for weather related emergencies might run afoul of the “salary basis” requirements.  The healthcare organization’s policies provided that if an employee did not report to work during adverse weather conditions, the employee was docked a full day of pay and not permitted to use vacation or personal leave to cover the absence.  However, if an employee arrived late to work, no matter how late, the employer would not dock the employee in any manner.

Consistent with its response to the first Opinion Letter, the DOL advised the employer that “when an employer remains open for business during a weather emergency, and an employee chooses not to report for work for the day due to the adverse weather conditions and/or attendant transportation difficulties, the employee’s absence in that situation is considered to be an absence for personal reasons.  Thus, any full-day deduction from the salary of an exempt employee for such reason will not violate the salary basis rule or otherwise affect the employee’s exempt status.”  If the employee arrived late, however, the employee would still be entitled to receive “a full-day’s pay for the partial day worked in order for the employer to meet the ‘salary basis’ rule.”

In light of these two DOL Opinion Letters, we recommend that employers review their policies and practices to ensure that they are treating weather-related absences and closures appropriately.