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When the wind blows: Wage and hour compliance after natural disasters

December 3, 2012

Article courtesy of SBAM Approved Partner ASE

By Kevin Marrs  

We have all seen the devastating images of the aftermath of Hurricane Sandy. Most of us can recall other similar natural (or man-made) disasters that have resulted in horrific loss of life and/or property. Some of us may have even lived through such events. Our thoughts and concerns always turn first to those recovering from the tragedy. But employers have to be practical also, because there are many opportunities to run afoul of the law. Like it or not, caution needs to be the watchword.

Natural disasters often result in unique working arrangement that create out-of-the ordinary wage and hour issues. A recent article from SHRM points out a few of them:
Reporting Pay:  Be aware of state requirements for call-in pay or “reporting” pay.  Non-Exempt employees may be eligible to receive compensation if they show up for work even if there is no work available to them.  Massachusetts, for example requires employers to pay workers for at least three hours at the minimum wage rate.  Although Michigan does not have such a requirement, a Michigan employer with employees in those states should take measures to notify them that the business is closed.
On-Call Pay:  Employers must also be cautious of the rules surrounding “On-Call” time.  The federal Department of Labor (DOL) states, “An employee who is required to remain on call on the employer’s premises is working while ‘on call’. An employee who is required to remain on call at home, or who is allowed to leave a message where he/she can be reached, is not working (in most cases) while on call. Additional constraints on the employee’s freedom could require this time to be compensated.”  If during a storm or in its aftermath you require non-exempt staff to be on-call, it may be deemed compensable time depending on the circumstances.
Volunteering for the employer- Employers negatively impacted by storms and disasters may seek, or even receive without asking for it, support from employees who “volunteer” to assist the employer.  However, under the FLSA, employees may not volunteer services to for-profit private-sector employers. The FLSA defines the term “employ” to include the words “suffer or permit to work.”  “Suffer or permit to work” means, in effect, not prohibiting employees from choosing to work on their own. If the employer even “allows” employees to work on this basis, the time spent is generally hours worked and would be compensable despite any good intention on part of the employee.

The employees of National Grid PLC, a utility company serving New York City,  hit the company with a putative class action November 17th. They alleged that they hadn’t received overtime pay for the 60- to 80-hour workweeks they had put in since Hurricane Sandy hit late last month.  The complaint was filed by Local 101 Transport Workers Union of America President Michael Conigliaro. It says that since Sandy hit October 29, employees in the affected areas have been working six to seven days a week on 12- to 16-hour shifts, which qualifies them for overtime.  But according to the complaint, the company failed to pay appropriate rates.

It is important to keep in mind that there few situations where the impact of a disaster like Sandy would release the employer from its obligations to follow the law.  Even the good intentions of employees may cause problems for the employer.

Understanding the law, acting on that understanding, and communicating effectively are an employer’s only sound protection against employee relations disasters of the kind National Grid now faces.

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