Answer: The answer depends on whether your employees are
nonexempt or exempt under the Fair Labor Standards Act (FLSA).

When your business is closed because of a power outage, inclement
weather, or any other reason, you generally are not required to pay
nonexempt employees since the FLSA only requires payment to these
employees for time actually worked. Many employers grant nonexempt
employees an authorized day off without pay when their offices are
closed because of weather emergencies. Others allow nonexempt
employees to use any paid time off so that they do not lose income
during the closing. Some will even provide paid days off, though you are
not required to do so.

Exempt employees, however, must be paid unless they are off for a full
workweek. According to interpretations of the FLSA by the Wage and
Hour Administrator, if you are closed because of inclement weather, you
cannot make deductions for full-day absences from an exempt
employee’s salary, since the absences are considered to be occasioned
by the employer. See Wage and Hour Admin. Op. Ltrs. FLSA 2005-41
(10/24/05) and FLSA 2005-46 (10/28/05).

The FLSA exemption regulations specifically do not allow deductions
from an exempt employee’s salary for absences occasioned by the
employer or by the operating requirements of the business. If the
exempt employee is ready, willing, and able to work, deductions may not
be made for time when work is not available. See 29 C.F.R.
§541.602(a). Payment, however, usually is not required if the exempt
employee does not perform any work during the entire week. See 29
C.F.R. §541.602(a).

On the other hand, the Department of Labor (DOL) treats the situation
differently when you are open for business. It has indicated in two
opinion letters that if the employer is open for business and an exempt
employee does not come to work that day, you may require the
employee to use a paid vacation day. See Wage and Hour Admin. Op.
Ltrs. FLSA 2005-41 (10/24/05) and FLSA 2005-46 (10/28/05). So, for
example, in Kennedy v. Commonwealth Edison Co., 410 F.3d 365 (7th
Cir. 2005), the court found that an employer’s snow day policy requiring
employees to use paid leave did not violate the FLSA salary basis
requirements.

Further, if the exempt employee does not have any paid time available,
you may dock the employee for a full-day absence. In its letters, the
DOL reasoned that the absence is a personal day since the employee
chooses not to come to work. See Wage and Hour Admin. Op. Ltrs.
FLSA 2005-41 (10/24/05) and FLSA 2005-46 (10/28/05).