Monday, March 20, 2017

To Pay or Not to Pay

We’re almost through the snow season in the North.  A lot of the country witnessed battering snow storms.  Of course, we are all familiar with the school closings, but most other nonprofit and public employers are more hesitant about closing than schools are.  What does the decision to close mean for your employees?  That was the question one county employer asked.  For the first time ever, I witnessed a nonprofit hospital in Maine announce it was closed for a day and half.  The hospital announced that the emergency room was open but all outpatient procedures were cancelled and satellite health clinics except one were closed. 

Winter in Maine 2017
Closures for snow, or for that matter hurricanes, or other unusual situations make you look at your personnel policies.  Should you pay your hourly employees that are sent home or told not to come in?  The first answer is no.  They are not working so there is no need to pay them.  They do not get paid for other times they don’t come in.  You may be paying others overtime to handle essential functions and to pay for extra storm related work.  You calculate these costs minus the unexpended costs of not paying hourly employees.  You will be paying your salaried employees during the snow day, but they are to make up any work they miss and some of them will be able to work from home.  If you are a public employer, you need to consider the taxpayers monies in the calculation if you pay employees to stay home.

When the Maine governor, Governor LePage, came into office, he said he wouldn’t close state offices if the company in which he was once an executive didn’t close its stores.  That's an argument for solving the problem by having all employees prepared to come in no matter what the storm.  The reality is letting all state employees out during between 4 and 4:30 whether salaried or hourly causes serious traffic problems.  That idea has gradually faded now that he is in his second term. 

Another way to look at it is based upon equity.  Equity theory states that an employee will judge how much work to do compared to others.  Perceptions are important in the calculation of the fairness and the adequacy of pay.  Further, if you have hourly employees who are unionized, are you paying unionized employees but not paying non-unionized employees who are sent home?  This argument is one of equity.  Even if salaried employees can work from home your non-unionized hourly employees will perceive not being paid unfair.

Do you have a pay policy for emergency situations or do you decide each time what to do?.  Does it matter if employees are sent home for part of the day or miss a whole day?  Do have a different policy for union and non-union employees?