The recent power outages from PG&E have affected our California operating hours. If our business is closed due to an electrical outage, will we still need to pay our employees?
The answer depends on several factors.
Power outages occur frequently, especially as the electric grid continues to strain under rapid urban development and natural disasters occur frequently. Extended periods of electric outage can force a business to close.
The Fair Labor Standards Act (FLSA) requires employers to pay employees only for hours that they have actually worked. Nonexempt employees are not paid while the office is closed, with one exception: employees who get fixed salaries for fluctuating workweeks must be paid their normally expected week’s salary. Employers can give employees the option to use paid time off during the outage, however.
If the power outage is temporary, for a few hours, the business can choose to remain open or closed for the remainder of the day. Employees who choose to stay to help secure the workplace must be paid for their time. Those who leave or are sent home, it is at the discretion of the employer if they wish to pay the employees for the remaining hours left up to normal business hours, or allow them to use their available paid time off.