COVID-19 Workplace Impact and Employer FAQs: Employee Pay
What if a business is forced to close early because of COVID-19? What if employees can't telecommute? Do non-exempt employees have to be paid? Answers here to these and more compensation-related questions. (Updated 4-3-2020.)
Q. Must employers pay employees who are denied access to the workplace?
A. Absent a contractual commitment to pay, including an applicable collective bargaining agreement, no federal law requires employers to pay non-exempt employees for time they do not actually work. Federal or state wage hour laws may require exempt employees to be paid their regular salary if they are directed not to report to work. For example, under federal law, if exempt employees work any part of a workweek, and then are out sick for the remainder of the week (or quarantined), they should be paid for the entire week, though the employer may require them to use PTO for that paid time. Some state or local laws may impose additional pay obligations for certain occupations, especially if employers provide little or no advance notice that employees are not to report to work as scheduled.
Q. If a business is forced to close, does it have to pay non-exempt employees?
A: Non-exempt employees (those entitled to minimum wage and overtime) are paid only for "hours worked." Therefore, if non-exempt employees miss an entire day's work because a business is closed and it didn't require them to report to work, the business generally is under no obligation to pay them, unless it has promised otherwise. An employer can give employees the option of using accrued paid time off for the time missed.
Q. What about exempt employees? Would a business have to pay them their full salary if it closes?
A: Exempt employees must generally receive their full salary in any workweek in which they perform work, regardless of the number of hours worked. If a company closes for less than a full workweek due to the virus, it must generally pay exempt employees their full salary, as long as the employees worked any part of the workweek.
Q. What if a company is forced to close early because of COVID-19? Does it have to pay non-exempt employees for the time they missed that day?
A: If the company closes early, federal law doesn't require it to pay non-exempt employees for the missed time, unless it promised otherwise. However, the business must pay these employees for any time they actually worked and for the time they stayed at work while the decision to close was being made. Note that some state laws require employers to pay employees for a minimum number of hours when they report to work but are sent home before the end of their scheduled shift. Employers should check their applicable law for pay requirements when employees are required to report to work but are sent home early.
Q. What if employees are quarantined and cannot telecommute? Does the employer have to pay them during the quarantine?
A: Employers should check applicable policies, collective bargaining agreements, and state and local paid leave laws to determine if pay is required. For example, federal or state wage and hour laws may require exempt employees to be paid their regular salary if they are directed not to report to work, unless it is in increments of a full workweek. Some state and local laws may impose additional pay obligations for certain occupations, especially if employers provide little or no advance notice that employees are not to report to work as scheduled. State and local paid leave laws may also require pay. Even in the absence of a requirement, some employers are electing to pay employees who are placed in quarantine and cannot telecommute.
Employers should also consider whether closing might subject them to state or local Worker Adjustment and Retraining Notification (WARN) Act laws, whether that's the federal WARN Act or similar state mini-WARN Acts. The federal WARN Act requires employers to provide 60 days' advance notice to covered employees, unions, and government officials prior to a plant closing or mass layoff at a single site of employment. State mini-WARN laws contain separate and distinct requirements from the Federal WARN Act that can be a trap to unwary employers. The Department of Labor has helpful information on its website: https://www.dol.gov/agencies/whd/fmla/pandemic
Learn more
Launch these webcasts anytime to get more information: Protecting Your Workforce and Understanding Policies as Your Organization Responds to COVID-19 (Parts 1 and 2)
Helpful information can be found here: ADP Employer Preparedness Toolkit — Coronavirus Disease (COVID-19)
The information provided by ADP is for general informational purposes only and is not legal, accounting or tax advice. The information and services ADP provides should not be deemed a substitute for the advice of such professionals who can better address your specific concern and situation. Any information provided here is by nature subject to revision and may not be the most current information available on the subject matter discussed.
