Many employers learned the hard way from the fury of Hurricane Irene in 2011 that hurricanes can present unique challenges for employers. Prudent employers should update your emergency plans to ensure not only the continuity of your operations and employee safety, but also potential legal issues that could arise as the result of a natural disaster. This blog entry is intended to acquaint you with at least some of the Federal and State employment-related laws that may be implicated. Note that the issues discussed below apply to any natural disaster situation, such as flood, fire, blizzard snowfall, earthquake etc.
Fair Labor Standards Act (“FLSA”)
The FLSA does not require employers to pay non-exempt hourly employees who are excused from work as a result of a hurricane. An exception exists for employees who receive fixed salaries for fluctuating work weeks, in which the employee agreed to work an unspecified number of hours for a specified salary. In this situation, an employer must pay these employees their full weekly salary for any week in which any work was performed.
An employer is required to continue to pay exempt employees for their time away from work if the workplace is closed for less than a full work week. However, an employer may require the employee to use accrued vacation time for the full days that he or she is unable to report to work during that time. If the employer is open for business, the Department of Labor considers an absence caused by transportation difficulties due to weather conditions an absence for “personal reasons.” In this situation, an employer may place an exempt employee on leave without pay or require the employee to use accrued vacation time.
Volunteers: There is no such thing as a “volunteer” for a private for-profit business. Employers must compensate workers for their service. Employers should be extremely cautious about having employees “volunteer” to assist the employer during an emergency if the work performed benefits the company and, in the regular course, would be performed by employees.
Leave Banks: The FLSA does not regulate the use of leave banks. Employers may offer employees paid leave for time spent volunteering to assist with disaster relief efforts.
Closure or Layoffs
Where the workplace closes for an extended period or layoffs are necessitated as a result of a natural disaster, if your business has more than 100 employees, then the WARN Act requires you to give your employees as much notice as is “practicable.” If an employer gives less than 60 days notice, the employer must prove that the conditions for the exception have been met.
If your business is unable to open for an extended period of time, your employee benefits may be affected. Because benefits are very fact specific, as a starting point, look to ERISA, the FMLA and COBRA as well as your benefits coordinator to be sure to assess your obligations.
Advice from the IRS
The IRS recently conducted a podcast to provide employers with information to prepare themselves for a natural disaster. Here’s a thumbnail of what that podcast addressed:
Records Retention: Create a backup set of records electronically that is stored away from the original set. These records include bank statements, tax returns and insurance policies.
Documentation of Valuables: Photograph or video tape the contents of your business that are of a higher value. A photographic record can help you prove the market value of items for insurance and casualty loss claims.
Fiduciary Bonds: Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect you in the event of default by the payroll service provider.
Americans with Disabilities Act (“ADA”)
Under the ADA employers who are physically or emotionally injured as a result of a natural disaster may be entitled to a “reasonable accommodation” by the employer provided that accommodation does not place an “undue hardship” on the operation of the business.
Uniformed Services Employment and Reemployment Rights Act (“USERRA”)
Employees who are part of an emergency services organization such as a Reserve Unit or the National Guard may be called to service as a result of a hurricane. USERRA prohibits discharging, denying promotion or denying any benefit of employment because of a person’s membership, performance of service or obligation to perform uniformed service. USERRA requires advance notice of service, but the Act does not specify the time limit within which notice must be given, rather it simply states that notice must be “timely.”
In the event that an employee wants to volunteer with the hurricane relief effort and has been absent from work, as an employer, you are not obligated to provide any employment protection unless that employee qualifies under USERRA. However, be careful when making any adverse employment decision in this situation. The employee may be eligible for FMLA leave or leave under one of your company’s other policies.
Family and Medical Leave Act (“FMLA”)
Employees requesting leave could conceivably be protected by the FMLA to the extent they otherwise meet FMLA eligibility requirements. Even in the absence of state or federal protection, an employer’s internal policies may extend protection to such individuals. Here again, we recommend that employers proceed with caution when deciding to immediately reject an unorthodox leave request before all of the facts are in; when disaster strikes, the federal government, along with state legislatures, may extend employment protections to those assisting with the relief effort. When in doubt, consult counsel to ensure your company’s compliance and to limit exposure.
The information provided in this blog entry is not intended to serve as legal advice, and is not a substitute for consultation with an experienced employment attorney. Most situations are highly fact specific. Employers should consult with counsel before taking action in any area that could result in legal liability.