The destruction wreaked by Hurricane Harvey on Houston and greater southeast Texas will close businesses for an undetermined amount of time and potentially leave out of work tens of thousands of people stuck in shelters or grappling with flooded homes.
In the early days after a major natural disaster—at least weeks of recovery—what should employers consider about pay and work obligations they can take to avoid long-term repercussions for failing to protect employees?
Harvey is the first major hurricane in a decade, since Hurricane Katrina ravaged Louisiana in 2005. In the aftermath of Katrina, companies were forced to confront work-leave issues and staffing strains. Workers’ rights organizations also took the U.S. Labor Department to task for not providing overtime compensation for storm cleanup. After Katrina, there were several major lawsuits surrounding leave and wage-and-hour issues. Many companies updated their disaster policies.
Until businesses resume operations, employers affected by Harvey have a few options they could consider, said Donald Schroeder, a partner at Foley & Lardner in Boston who specializes in employment law.
Employers should explore whether they can relocate operations from Houston, Schroeder said, and they should look at their leave policies—or even consider imposing a mandatory leave. He also said employers should assess any policies that affect whether nonexempt employees are required to use paid time off during the shutdown period.
“Communication with the workforce is critical,” Schroeder said. “Employees may assume they are being paid by the company even though they are not able to report to the company’s location due to flooding or, worse yet, complete destruction of the company’s offices and/or their residences.”
Schroeder said a company’s failure to communicate about compensation and other matters “can potentially lead to multiple wage-and-hour problems down the road.”
The three biggest labor areas employers will face are wage payment, leave issues and staffing, said Kim Rives Miers, a Littler Mendelson shareholder in Dallas.
“This is not your typical hurricane,” Miers said. “People will be out for such an extended period of time, employers will be forced to make hard decisions.”
Federal labor laws only entitle hourly workers to compensation if they are working, even if they are not working because a worksite is shut down or if an employee decided to evacuate. Yet, there could be exceptions during a major weather event. Employers could consider on-call time and companies must pay for remote work.
Employees who are on salary, or exempt workers, must be paid their wages, even when an employer shuts down its operations. With salaried workers, employers may require them to use vacation or sick time, depending on the company’s policy.