To pay or not to pay: Employers decide when Sandy shut them down

The Greyhound Lines Inc. employee on her way home from work Monday said she's the kind of worker who prides herself on always being on the job.

So she's not happy that Greyhound is docking her for Oct. 29 and 30 - the two days that the entire region was shut down due to Hurricane Sandy.

"I'm totally upset," she said. "I think it's horrible. They were closed anyway."

Because the employee would like to keep her job, she doesn't want her name published, but she acknowledged that companies are in a tough spot, too. After all, they couldn't make any money when they were closed.

"You can't fault anyone," she said. A Greyhound spokesman said employees could choose to use vacation or personal days to cover for the absence.

To pay, or not to pay, that is the question.

The law is fairly straightforward. Hourly employees, covered by the U.S. Fair Labor Standards Act, do not have to be paid if they don't work - and it doesn't matter why they aren't working.

However, if they worked from home, they must be paid for the time they worked. Union contracts may have different provisions.

Under the law, managers and salaried employees must be paid, no matter what.

"If they are ready, willing, and able to report to work and the employer decides to close, they have to be paid," said Susan Lessack, a partner specializing in employment law at the Berwyn office of Pepper Hamilton L.L.P.

However, Lessack said, they can be required to use vacation or other paid days.

One employer that took that approach was the Cooper Health System in Camden.

Nonessential employees were able to choose between not being paid at all or using vacation or sick days. They could also "borrow" paid time off if they had not accrued it.

"This is a standard policy," said Cooper spokeswoman Lori Shaffer. "This is how we do it."

Franklin Mint Federal Credit Union decided it would pay its 350 employees, and not require them to dip into their paid time off.

"If the company makes the decision to close, it's not anything the employee has control over," said Barbara Guido, vice president for human resources.

And, she said, the Broomall-based company wants to be known as a good employer.

"The right thing to do is to pay people, but what would you do if it were an extended amount of time? That would be expensive," she said. "Think of people who live paycheck to paycheck. How does that affect them? It's an interesting question."

Companies need to weigh expenses against morale, said Jacalyn "Jackie" Reinberg, regional senior consultant for absence and disability management for Towers Watson, an employee benefits firm.

At least, she said, companies should consider the absence, paid or unpaid, as excused time off and not count it for disciplinary purposes.

"I think employers can use an opportunity to create a level of engagement to make sure they are taking care of employees in a positive way," she said.

What companies do and how employees react depends mostly on the economy, she said.

"In a good economy, [docking people's pay] would make them angry," she said. "In a tough economy, employees are going to be glad it's an excused absence."

Employees may appreciate the chance to trade paid time off for money to make the rent or the mortgage.

"With the current economy," Reinberg said, "most employees are happy to have a job."