HR Hotline: Do We Have to Pay Employees for Unexpected Shutdowns?
Q: Our company manufactures and sells tools. Our local fire department required our business to close late yesterday morning, after a propane truck rolled over in the neighborhood. We sent all of our employees home for the day, to return today.
Is there some minimum amount that we’re required to pay them, despite nearly no work getting done yesterday?
A: If your business works in the mercantile trade, then yes, you must pay your non-exempt employees “minimum daily earnings.”
This means that an employee who reports for duty on any day at the employer’s request—whether or not work is ultimately assigned—must be compensated for a minimum of four hours’ earnings at their regular rate of pay.
The only exception to this rule is for those employees who are regularly scheduled to work fewer than four hours in a day.
If those employees waive the minimum hour requirement in writing, and the waiver is approved by the Connecticut Labor Department, the employer will not be subject to the usual minimum daily earnings requirement, as long as the employees are at least paid a daily rate of twice the minimum hourly rate.
More information about minimum daily earnings for mercantile workers can be found here.
So does this law apply to your business?
Connecticut law defines mercantile trade as “the trade of wholesale or retail selling of commodities and any operation supplemental or incidental thereto, including but not limited to, buying, delivery, maintenance, office, stock, and clerical work.”
Note that repair and service workers may be excluded from this rule if the majority of their duties is unrelated to mercantile trade.
If your business sells tools, whether wholesale or retail, your company likely falls within this definition.
It’s also important to remember that, regardless of your company’s work in the mercantile trade, you must also pay your exempt employees for the day.
This is because exempt employees are paid on a salary basis, and a salary is a predetermined amount paid for each pay period, regardless of the number of days or hours actually worked.
In some limited circumstances, an employer may reduce an exempt employee’s salary, such as when the worker takes a full personal day.
However, when the reduction in work or hours is caused by the employer—whether because it’s complying with a fire department order or closing early due to snow—the employer must pay exempt employees for the full day.
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