Dealing with employee compensation in the aftermath of Sandy
Superstorm Sandy has devastated many parts of the Eastern Seaboard in general, and has caused immense destruction to the Rockways and Coney Island in particular. Lives have been lost, property has been destroyed and many businesses have been forced to remain closed as communities try to recover. As many struggle to attain habitable conditions, employees and employers are faced with major questions surrounding financial and compensation issues.
In advance of Sandy, Mayor Bloomberg and MTA Commissioner Joseph Lhota, shut down the 24-hour subway and bus service that many New Yorkers rely on for transportation. Sandy left flooded subway tunnels and downed power lines in her wake.
Unable to reach their place of employment, either because they were displaced by the storm or due to a lack of access to transportation, many New York employees have missed days — in some cases weeks — of work. The looming question for these employees is: Can I get paid for these missed days and if so, when?
Sharon Stiller, a partner at Abrams Fensterman, a law firm with offices at MetroTech and in East Flatbush, said in diasters “the first thing to do is survive … then you deal with making sure employees and employers have adequate resources.” Employers are now beginning to discern how to pay employees for the downtime incurred during Sandy.
“In most cases there are hard and fast rules regarding employee compensation,” Stiller noted. He explained that employees fall into one of three categories: Non-exempt hourly employees, non-exempt salaried employees, and exempt employees.
With regard to non-exempt hourly employees, private employers need only pay employees for the hours that they worked. However, if the employee was required to come in to work but was sent home because of the hurricane, then New York state law requires that the employee be paid for “call-in” time, which is usually four hours at minimum wage or the employee’s regular shift, whichever is less.
In the case of non-exempt salaried employees, an employer must pay these employees their full weekly salary for any week in which any work was performed. And finally, with regard to exempt employees, if the employer was open for business, then an exempt employee’s absence due to a state of emergency is deemed to be an absence for personal reasons and the employer can dock the employee’s wages for a full day’s absence.
If, on the other hand, the office was closed as a result of the hurricane, then an employer may not dock an exempt employee’s pay, but may require the employee to use vacation or other accrued leave.
“Employers can, however, be more lenient than the rules,” said Stiller. “Many employers are paying employees even if they are not required to.” Employees are not the only ones with financial questions. Many employers are concerned about saving money to rebuild businesses that were damaged and paying employees despite the loss of revenue stream caused by Sandy.
“There are programs available for New York business owners as they work to rebuild,” he advised. “There is the NYC Hurricane Sandy Emergency Loan fund, the Hurricane Emergency Sales Tax Exemption Program and the Small Business Administration provides disaster loans.”
New York state officials estimate the cost of Sandy at $30 billion, and the cost to rebuild after the devastating 2005 Hurricane Katrina was approximately $150 billion.
“These storms are not just damaging small towns,” Stiller said. “New York in general and Brooklyn in particular, services not only New York state but, international markets as well. The immediate issues of ‘do I pay my employees’ will die down in a few months, but the lesson Sandy teaches us is that business owners have to factor disasters into their business planning.”
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