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Know your employee pay requirements during a utility power failure

October 30, 2019 3294

With planned power shut-offs developing across California in attempt to avoid wildfires, employers are wondering how they are to compensate their nonexempt (hourly) employees when businesses are unable to be open for work due to power failures.

In general, employers are obligated to pay “reporting time pay” to hourly employees when these employees are required to report for work and aren’t provided at least half of their usual hours for the day. An employer must pay the greater of half of their scheduled day (up to four hours) or, at minimum, two hours at their regular rate of pay.

However, employers are not required to pay hourly employees if any one of the following exemptions applies:

  • When operations cannot begin or continue due to threats to employees or property or when civil authorities recommend that work not begin or continue.
  • When public utilities fail to supply electricity, water or gas or when there is a failure in the public utilities or sewer system.
  • When the interruption of work is caused by an act of God, such as an earthquake, or other cause not within the employer's control.

Should a business encounter a power failure during a workday, hourly employees should be compensated for their hours worked.

Laws concerning pay deductions for exempt (salaried) employees differ. Deductions may not be made for time when work is not available if the employee is ready, willing and able to work.

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