On March 15, 2020, Governor Newsom called upon all bars, wineries, nightclubs, brewery tap rooms and other alcohol related venues to close. While the order is not legally enforceable, employers in the state need to decide if they are going to close, and plan for potential closures in the near future. California employers need to plan for and understand their obligations regarding wage and hour laws that will likely be issues during the next few weeks.
Must an employer pay an employee who cannot work during an emergency, such as during a government mandated shut-down?
Generally, there is no legal obligation for employers to pay employees if the business is shut down because of an Act of God (see below), or if an employee needs time off because of an evacuation order, to care for themselves, family members, or protect their property (except if it triggers paid sick leave under local or state law as discussed below).
However, if the employee is an exempt employee, generally, they must be paid their full weekly salary if they perform any work during the week. There are some limited exceptions to this, but employers must approach this issue with caution. Exempt employees must be paid their salary, and generally the only exception to this is if they perform no work for the entire workweek, and the reduction in pay for the week does not bring them under the salary threshold.
As for hourly, non-exempt employees, employers may permit employees to take any PTO or accrued vacation during times of disasters. If the employee is sick or must attend to a family member who is sick as a result of the disaster, this time off would also likely trigger paid sick leave under state or local law.
Reporting time pay obligations
California law requires an employer to pay “reporting time pay” under the applicable Wage Order. This requires that when an employee is required to report for work and does report, but is not put to work or is furnished less than half of the employee’s usual or scheduled day’s work, the employee shall be paid for half the usual or scheduled day’s work, but in no event for less than two (2) hours, nor more than four (4) hours, at the employee’s regular rate of pay, which cannot not be less than the minimum wage.
In addition, if an employee is required to report to work a second time in any one workday and is furnished less than two hours of work on the second reporting, he or she must be paid for two hours at his or her regular rate of pay.
California’s Labor Commissioner provides the following example:
[I]f an employee is scheduled to report to work for an eight-hour shift and only works for one hour, the employer is nonetheless obligated to pay the employee four hours of pay at his or her regular rate of pay (one for the hour worked, and three as reporting time pay). Only the one-hour actually worked, however, counts as actual hours worked.
Employers must remember, when an employee is scheduled to work, the minimum two-hour pay requirement applies only if the employee is furnished work for less than half the scheduled time.
Exceptions to the reporting time requirements – “Acts of God”
The Wage Orders provide that employers are not required to pay overtime pay during the following circumstances:
- When operations cannot begin or continue due to threats to employees or property, or when civil authorities recommend that work not begin or continue; or
- When public utilities fail to supply electricity, water, or gas, or there is a failure in the public utilities or sewer system; or
- When the interruption of work is caused by an Act of God or other cause not within the employer’s control, for example, an earthquake or a pandemic such as the coronavirus.
Time paid as reporting time pay does not trigger overtime pay
Reporting time pay for hours in excess of the actual hours worked is not counted as hours worked for purposes of determining overtime.
Is reporting time pay required if an employee voluntarily leaves work early?
Employers are not required to pay reporting time pay if the employee voluntarily leaves work early. For example, if the employee must leave if they become sick, or must attend to personal issues outside of work and leaves early, then the employer is not obligated to pay reporting time pay (however, this may trigger paid sick leave or other legal obligations for the employer).
Below are some other resources my firm developed to aid employers during the coronavirus epidemic:
Employer Contingency Plans for Coronavirus:
Guidance on Preparing Workplaces for COVID-19: