In the wake of Hurricane Ida, many employers are struggling to find ways to maintain their business and protect their most precious asset: their employees. In this article, we review some of the most frequently asked labor and employment law questions facing employers in the aftermath of this catastrophic storm, including payroll issues, attendance issues, layoffs and the WARN Act, unemployment compensation issues, FMLA and USERRA leaves, cleanup work and related workplace safety issues, ADA accommodations, and available federal assistance.
- Paycheck Timing Issues
Many employees are paid via direct deposit, which has not likely been disrupted by the hurricane. However, some employees are paid through check or other forms of payment, which can cause complications when employees are displaced or the employer’s office is not fully operational. In Louisiana, employers that fail to designate specific paydays must pay wages on the first and 16th days of the month or as near to those days as possible. Employers in the manufacturing, oil, and mining industries that have at least 10 employees are required to pay wages at least twice a month and payment must be made by the payday at the end of the next payroll period. See La. Rev. Stat. 23:633.
Fortunately, Louisiana law allows some leeway for employers that fail to pay employees on the day that paychecks should be delivered due to reasons that are beyond their control. Excessive delay in getting payment to employees, however, could result in fines or even imprisonment.
- Non-Exempt Employees Only Need to be Paid for Time that They Work
Non-exempt employees are employees that are paid hourly or that are paid on a salaried basis but do not satisfy the duties tests for exemptions from overtime. Under the Fair Labor Standards Act, these non-exempt employees only need to be paid for time that they actually work. While employers may choose to do so for benevolent reasons (usually by utilizing Internal Revenue Code Section 139 outlined in question 9 below), they don’t owe these employees pay for shifts missed due to the storm.
- Pay for Exempt Employees
Normally, exempt employees must be paid their full salary for a week in which they perform any work, no matter how many days or partial days they work. There are some notable exceptions that apply in the wake of Hurricane Ida.
The DOL has suggested that employers that are open for business during a weather emergency may deduct one day of salary from exempt employees that do not report for work for the day due to adverse weather conditions (i.e., employees that do not work for personal reasons). Deductions for less than a full day, however, are not permitted.
The regulations are clear that employers cannot use deductions “for absences occasioned by the employer or by the operating requirements of the business.” Thus, if the employer closes operations due to a weather-related disaster, it must pay the exempt employee “the full salary for any week in which the employee performs any work without regard to the number of days or hours worked,” because “deductions may not be made for time when work is not available.” See 29 C.F.R. § 541.602(a).
Exempt employees may become eligible for overtime if they are reassigned to perform duties outside the applicable overtime exemption as a result of storm-related impacts on the business. For example, employers may inadvertently cause exempt employees to become eligible for overtime if they assign them to perform cleanup work and other basic tasks to make the business run again (e.g., a computer professional who is reassigned to clean up the office, move around furniture, and perform other tasks outside the scope of the computer employee exemption may not meet the computer professional exemption for that week). You can read more about the duties tests here.
- Enforcing Attendance Policies and Terminating Employees that Do Not Return to Work
Employers should generally not fire or discipline employees for following a mandatory evacuation order, unless the employees are essential workers required to stay during an emergency such as firefighters, police officers, emergency medical technicians, medical staff, and other individuals required to provide services for the benefit of the general public during the emergency. These individuals, who are often provided emergency shelter to stay during the hurricane, can be disciplined or terminated for evacuating when they were required to work.
Employers may require employees to appear for work once the business is reopened and it is safe to return to work. However, employers should not force employees to work under dangerous conditions. OSHA’s General Duty Clause requires employers to provide employees with a work environment that is “free from recognized hazards that are causing or are likely to cause death or serious physical harm.” Thus, employers may enforce their attendance policies and impose discipline for policy violations as long as there is not a mandatory evacuation order or the working conditions are unsafe (e.g., employees may not be required to work in a building that has been severely damaged and poses a risk of injury).
- Layoffs and the WARN Act
Some employers have suffered storm-related damage that has left them with no choice but to shut down their business or lay off employees. These employers are required to follow the WARN Act if they have 100 or more employees, not counting those who have worked less than six months in the last 12 months and those who work less than 20 hours per week, or if they have 100 or more employees, including part-time workers, who in the aggregate work at least 4,000 hours per week, exclusive of overtime.
The WARN Act covers layoffs and plant closings at single sites of employment when 50-499 employees are laid off in any 30-day period if these employees constitute at least 33% of the workforce and the layoff results in an employment loss for more than six months (for multiple layoffs that occur in succession there is a 90-day look back period). Covered closings occur when there is a temporary or permanent shutdown of an employment site that results in an employment loss during any 30-day period for 50 or more employees.
The WARN Act requires employers to provide 60-days’ notice of any plant closing or mass layoff unless the employer meets any of these three exceptions.
- Faltering Company Exception–applies to closings but not mass layoffs and requires that the employer sought capital or business at the time that the 60 days’ notice would have been required, there was a realistic opportunity to obtain capital or business, the capital or business would have been sufficient to avoid the shutdown (the employer must objectively show this), and the employer reasonably and in good faith believed that the required notice would have precluded the employer from obtaining the business or capital.
- Unforeseeable Business Circumstances Exception–applies when business circumstances were not reasonably foreseeable at the time that 60 days’ notice would have been required. The circumstance must be a dramatic change outside of the employer’s control like losing a major contract or a dramatic economic downturn.
- The Natural Disaster Exception–only applies if a plant closed or mass layoffs ensued because of a natural disaster.
Layoffs and plant closings related to Hurricane Ida would likely qualify for the Natural Disaster Exception but employers that need to conduct a mass layoff or engage in a plant closing should consult counsel before engaging in a layoff or closing.
- FMLA and USERRA Leave
Employees may qualify for leave under the Family and Medical Leave Act (“FMLA”) after a hurricane if they suffer from a physical or mental condition that makes them unable to do their jobs and meets the definition of a serious health condition under the FMLA, or if they need to care for a family member with a serious health condition. Examples where FMLA leave may be required include: an employee that is physically injured during a hurricane or an employee who suffers from stress, anxiety, or depression caused by the hurricane that makes them unable to return to work. Employers should be prepared to provide FMLA leave to employees with qualifying reasons and consult with counsel to determine what documentation is needed for the leave.
Some employees may also be able to seek leave under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”). Normally, employees covered by USERRA are leaving to engage in some form of active military service. However, members of the National Disaster Medical System (NDMS) are also covered under the Act. Employees that are NDMS members and receive federal activation on behalf of NDMS to go to a disaster area for their services, even if the activation is voluntary, are entitled to leaves of absence and reinstatement upon their request. If any employee informs an employer of leave needed under this requirement, then the employer should grant the leave and obtain the documentation that is permitted under USERRA.
- Unemployment Compensation and Charge Back Issues
Generally, employees are eligible for unemployment compensation for any time that they are out of work while a business is closed, including a closure due to Hurricane Ida. Many employees that do not qualify for regular unemployment may qualify for Disaster Unemployment Assistance. Employers can read more about this coverage here.
It is not clear at this time if employers’ unemployment accounts will be charged for benefits paid as a result of a termination caused by the hurricane. Sometimes benefits paid as a result of such discharges are not charged back to the employer. For example, during the COVID-19 pandemic some employers were not charged for termination-related benefits stemming from the pandemic.
- Workplace Safety Issues and Reassigning Employees that Return to Work After the Hurricane
OSHA has guidance for response and recovery workers after Hurricane Ida that is helpful for businesses considering whether to assign workers to cleanup efforts in their business. OSHA’s guidance states:
Only individuals with proper training, equipment and experience should conduct recovery and cleanup activities.
After a weather disaster, those involved in response and recovery should:
- Evaluate the work area for hazards.
- Assess the stability of structures and walking surfaces.
- Ensure fall protection when working on elevated surfaces.
- Assume all power lines are live.
- Keep portable generators outside.
- Stay hydrated and protect against hazardous heat exposure.
- Operate chainsaws, ladders, and other equipment properly.
- Use personal protective equipment, such as gloves, hard hats, and hearing, foot, and eye safeguards.
No employees should be forced to work in a building that is unsafe. Any complaints by employees should be carefully considered and addressed. All employees should be trained on what is expected of them during the cleanup and they should avoid doing any dangerous tasks that they are not trained to do.
- Internal Revenue Code Section 139 and Qualified Disaster Relief Payments
Many employers want to help employees even if they are not paying wages to an employee in a week or for days that the business is closed due to a hurricane. Fortunately, there are options for employers to help employees as the federal government has declared Hurricane Ida a federal disaster in Louisiana.
IRS Code Section 139 allows employers to make “qualified disaster relief payments” without paying income or payroll taxes. Moreover, qualified disaster relief payments are generally deductible as ordinary and necessary business expenses. Employers wishing to help employees may pay or reimburse for reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a qualified disaster. Employers can also pay or reimburse employees for the “reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence or repair or replacement of its contents to the extent that the need for such repair, rehabilitation, or replacement” is caused by Hurricane Ida.
These benefits may include medical payments for injuries that occurred as a result of the Hurricane, housing costs incurred as a result of the hurricane, and funeral expenses. Employers wishing to help employees should consider utilizing this provision to help their employees and consult with tax counsel to ensure they do so in a compliant manner.
- ADA Accommodations and Hurricanes
As a result of the hurricane, some employees may develop injuries or illnesses that may qualify as disabilities and need to be accommodated under the Americans with Disabilities Act (ADA), which applies to all employers with 15 or more employees.
Under the ADA a disability is a physical or mental impairment that substantially limits one or more major life activities; a record of such an impairment; or being regarded as having such an impairment. Major life activities include “caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working.” They also include major bodily functions such as “functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions.”
Among the possible post-hurricane disabilities that may need to be accommodated are issues related to post-traumatic stress disorder, depression, anxiety disorders, and individuals that suffer qualifying injuries (e.g., certain back injuries and amputations). If an employee mentions or shows the signs of struggling with such possible disabilities, the employer should engage in the ADA interactive process with the employee to determine the appropriate accommodation.
- Federal Assistance Available for Employers
There are a number of programs and benefits that are available to employers suffering from the consequences of Hurricane Ida.
The IRS website states that “[b]oth individuals and businesses in a federally declared disaster area can get a faster refund by claiming losses related to the disaster on the tax return for the previous year, usually by filing an amended return.”
The IRS also provides Publication 2194, Disaster Resource Guide for Individuals and Businesses, which is “a resource guide designed to help businesses claim casualty losses on property that was damaged or destroyed by a natural disaster.”
The IRS website also lists a number of resources for businesses available here, which includes the following resources:
This is a one stop Web portal that consolidates information from 17 US Government Agencies where taxpayers can apply for Small Business Administration loans through online applications, receive referral information on forms of assistance that do not have online applications, or check the progress and status of their applications online.
Federal Emergency Management Agency (FEMA)
Federal disaster aid programs provided by the Federal Emergency Management Agency (FEMA) are available to citizens affected by major disasters.
Small Business Administration (SBA)
The U. S. Small Business Administration (SBA) is responsible for providing affordable, timely and accessible financial assistance to homeowners, renters and businesses of all sizes located in a declared disaster area. Financial assistance is available in the form of low-interest, long-term loans for losses that are not fully covered by insurance or other recoveries.
Learn how individuals and business can prepare for and respond to all kinds of disasters and emergencies.
GovBenefits.gov wants to let survivors and disaster relief workers know about the many disaster relief programs available. Perhaps you have suffered damage to a home or business, lost your job, or experienced crop damage due to a natural disaster. GovBenefits.gov has a variety of national benefit and assistance programs geared toward disaster recovery.
Employers affected by Hurricane Ida are dealing with a myriad of issues in restarting their businesses and accounting for their employees.