The U.S. Department of Labor (DOL) posted new guidance this week clarifying compensation requirements for employees who have worked only partial work weeks due to coronavirus-related business closures.
Salaried workers exempt from being paid overtime, if mandated by their employers to stay home, must be paid in full even if they complete only a partial week’s work. Non-exempt workers are not similarly protected. Under the Fair Labor Standards Act (FLSA), employers need only pay non-exempt employees for hours worked, regardless of whether they had been scheduled to work additional time.
“The general rule is that you don’t have to pay [exempt workers] for a week in which they perform no work, but if they work a portion of the week then you owe an exempt employee their full salary,” Zach Hutton, an employment lawyer with the Paul Hastings law firm, told Yahoo Finance.
Hutton said he’s been fielding questions from employer clients uncertain of their responsibilities to compensate employees when the quantity of an employee’s work is compromised as a result of working outside the usual place of business. Until the DOL issued its new guidance it was unclear whether a viral outbreak would justify reducing employee compensation.
“The new guidance reinforces that if an employer has a shutdown and instructs employees to stay at home and not work, an exempt employee doesn’t have to be paid for a week in which they perform no work, but they generally do have to be paid for a week in which they perform some work,” he said.
Do Employers have to pay for work-at-home expenses?
Additional unforeseen expenses that may arise for employers are tied to local rules that can require reimbursement of employee expenses incurred during a work-from-home mandate. In certain states the scenario triggers non-negotiable costs for employers.
In California, for example, employers must reimburse reasonable and necessary employee business expenses, Hutton said. “So if [employers] suggest, or strongly suggest, or require that an employee telecommute,” he said, “then you can unwittingly end up with an obligation to pay for a portion of the employees’ expenses.”
Expenses could include home office equipment, supplies.