On October 29 and October 30, 2012, Hurricane Sandy, a tropical cyclone, struck New Jersey and New York, killing over a hundred people, destroying thousands of homes and businesses, and leaving millions without electric power for days or weeks. As a result of Hurricane Sandy and the blackout that the hurricane caused, numerous businesses in New York closed for several workdays or more. Various employers in New York have asked me whether they must pay their employees for the workdays on which, because of the severe weather conditions and the blackout, the employers were closed.
The answer turns on whether the involved employer’s workers are exempt or, instead, non-exempt, under federal law and New York law, from the receipt of overtime compensation and the minimum wage.
Although New York law does not require it, a company in New York, as a practical matter, must fully pay employees who are exempt from federal overtime laws for reporting for duty when the company is closed because of inclement weather or loss of electric power.
This is the case because the regulations promulgated under the Fair Labor Standards Act, 29 U.S.C. §§ 201 – 219 (the “FLSA”), generally require, as a condition of exempt status, that exempt employees “receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked.” 29 C.F.R. § 541.602(a).
In particular, “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 the 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); see Wage & Hour Div., U.S. Dep’t of Labor, Administrator Op. Ltr. FLSA2005-46, slip op. at 2 (Oct. 28, 2005); Wage & Hour Div., U.S. Dep’t of Labor, Administrator Op. Ltr. FLSA2005-41, slip op. at 1-2 (Oct. 24, 2005).
So, too, the regulations issued under the New York Labor Law (the “NYLL”) generally require, as a condition of exempt status, that exempt employees be paid a “salary,” 12 N.Y.C.R.R. § 142-2.14(c)(4)(i)(e), 142-2.24(c)(4)(ii)(d). Under 12 N.Y.C.R.R. § 142-2.14(c)(4)(i) and (ii), ” ‘salary’ means receipt of fixed, regular compensation (i.e., not subject to weekly variation by hours worked).” Torres v. Gristede’s Operating Corp., No. 04 Civ. 3316, 2006 WL 2819730, at *13 (S.D.N.Y. Sept. 29, 2006).
In general, if a business in New York makes deductions from the salaries of exempt employees for the business’s closure for less than a full workweek, “the exemption [from federal overtime laws] is lost during the time period in which the improper deductions were made for employees in the same job classification working for the same managers responsible for the actual improper deductions.” 29 C.F.R. § 541.603(b).
As to employees who are non-exempt under New York law from overtime compensation and the minimum wage, New York State has a “[c]all-in pay” regulation that requires an employer to pay each non-exempt employee, for each workday on which the employer was closed because of flooding, lack of power, or the like, “for at least four hours, or the number of hours in [the non-exempt employee’s] regularly scheduled shift, whichever is less,” at the minimum wage ($7.25 per hour). 12 N.Y.C.R.R. § 142-2.3.
However, under the NYLL’s regulations, “the basis for the minimum and overtime wage payment . . . [is] weekly.” Division of Labor Standards, N.Y. State Dep’t of Labor, Counsel Op. Ltr. RO-09-0133, slip op. at 1 (Dec. 2, 2009); see 12 N.Y.C.R.R. § 142-2.3. As a result, “if the amount paid to a [non-exempt] employee for the workweek exceeds the minimum and overtime rate for the number of hours worked and the minimum wage rate for any call-in pay owed, no additional payment for call-in pay is required during that workweek.” Division of Labor Standards, N.Y. State Dep’t of Labor, Counsel Op. Ltr. RO-09-0133, slip op. at 1-2 (Dec. 2, 2009).
Call the Law Offices of David S. Rich, LLC at (347) 941-0760 to speak with a knowledgeable labor and employment lawyer about ensuring that your company complies with overtime pay and other wage and hour laws, or to retain a skilled overtime attorney to defend your company in unpaid overtime lawsuits or other wage and hour litigation.
About the Author David S. Rich is the founding member of the Law Offices of David S. Rich, LLC,
a New York Employment and Business Litigation Law Firm, in New
York City and in Englewood Cliffs, New Jersey...Read more