By Whitney Caldwell and Emily L. Connor, both of Littler Mendelson PC
In the aftermath of the recent hurricanes, wildfires, and earthquakes, business clients are wondering how natural disasters impact their legal obligations as employers, as well as what legal resources are available to assist affected employees. In Indiana, we have been fortunate enough to avoid the brunt of these natural disasters, but our clients’ employees have been heavily affected. Clients should have a plan in place to ensure the health and safety of all employees, as well as the successful continuation of their business, after a severe natural disaster. A variety of workplace laws come into play when developing and implementing a disaster response plan.
Employers should be prepared to accommodate requests for leave to deal with personal ramifications of natural disasters, or to help with emergency response efforts. Employers who employ at least 50 employees within a 75-mile radius of a given worksite, should be prepared to provide leave to eligible employees under the Family Medical Leave Act (FMLA). The FMLA permits eligible employees to take leave if they or a family member suffer serious injury or illness, including injury or illness caused by a natural disaster. Federal leave protection is not limited to the FMLA or medical conditions. The Uniformed Services Employment and Reemployment Rights Act (USERRA) and related Indiana law protect employees who leave work to undertake military service, service in the National Disaster Medical System, or provide volunteer emergency relief services. Of course, in addition to federal and state requirements to provide leave, employers should anticipate additional and unusual leave requests. Employers should handle these requests on a case-by-case basis, but be consistent in applying practices.
Employers also should be familiar with the federal and state wage and hour laws detailing their obligations to compensate employees unable to work due to weather. Generally, disasters affect employer obligations differently for non-exempt, or wage-based, employees and exempt, or salaried, employees. Under the Fair Labor Standards Act (FLSA) and, by extension, Indiana law, non-exempt employees must be paid only for time spent working. Employers are not required to compensate non-exempt workers for time they do not work due to a natural disaster.
Exempt employees, however, must be paid their full salary if an employer shuts down operations for less than a full work week due to adverse weather conditions. This is true even if the salaried employee works only part of a day during the week. If the business remains open and an exempt employee is not able to report to work due to the weather, that employee is considered absent for personal reasons and the employer may require the employee to use accrued paid time off to cover the absence. If the salaried employee has no available PTO, the employer may reduce the salaried employee’s compensation for full days not worked.
In all cases, employers must be consistent when applying compensation policies and when providing notice of applicable policies and decisions to all affected employees.
Indiana employers may be facing shut down of operations in affected areas. In the unfortunate event that a business must consider closing a facility or conducting mass layoffs as a result of a natural disaster, the Worker Adjustment and Retraining Notification Act (WARN) and various state laws require certain employers to provide 60 day advance notification of plant closings and mass layoffs. Employers should work with their counsel to ensure compliance with the applicable requirements.
Providing Financial Assistance and Accommodating Injuries
Following natural disasters, employers often inquire about their options for providing financial and other assistance to employees. Employers have legal resources to help affected employees recover after a disaster. The IRS permits employers to make qualified disaster relief payments to help employees with personal expenses resulting from a natural disaster, without retaining or paying income or payroll taxes. Again, employers should work with their lawyers and tax professionals to ensure compliance with the applicable regulations.
Employees who are physically or emotionally injured by the impact of a natural event may be entitled to a reasonable accommodation at work, under the Americans with Disabilities Act (ADA). Employers should engage with affected employees to evaluate potential accommodations and ensure they are implemented fairly and consistently. Likewise, employers’ Employee Assistance Programs may be a good resource for individuals with emotional or psychological impact following a natural disaster.
Depending on the nature and scope of the natural disaster, other laws and internal policies may apply. These include, but are obviously not limited to, property and casualty claims, workers’ compensation inquiries, unemployment compensation, benefits continuation options, and tax reporting duties.
Even businesses not impacted by the most recent series of weather events should take this time to review their policies and procedures and be prepared to assist its employees and comply with legal obligations in response to future events.
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