• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube
Big Ideas for Small Business logo

Barbara Weltman

Big Ideas for Small Business, Inc.

Whitepaper download

Subscribe and download our eBook, "150+ Tax Deductions for Small Business A to Z."

This field is hidden when viewing the form
Get the:

  • Home
  • About Us
  • Big Ideas For Your Business
    • Idea Of The Day ®
    • SMB Legal
    • SMB Taxes
    • SMB Financial
    • Small Business
    • Newsletter Archive
  • Services
  • Books
  • Blog
  • Multimedia
    • Videos
    • Radio Shows/Podcasts
  • Be a Guest Blogger

Your Obligation to Employees during Emergency Shutdowns

October 12, 2017 / By Barbara Weltman

Emergency ShutdownsThe hurricanes got me thinking … do employers have to pay their staff during the period that a company is shut down? Hurricanes aren’t the only situation in which a temporary shutdown can arise. A fire, blizzard, government-ordered closure, or any number of other reasons may temporarily force you to close your doors. Understand the legal and practical ramifications for your employees.

Federal law requirements

The Fair Labor Standards Act (FLSA) requires you to pay non-exempt (i.e., hourly) workers only when they actually work. For exempt (salaried) employees, the FLSA requires payment for an entire week, so if your office closes on Wednesday, you owe these workers their salary through Friday. The DOL says, “a private employer may direct exempt staff to take vacation or debit their leave bank account.”

If, because of economic conditions, you want to have a temporary shutdown, you may be required to give advance notice to employees (it depends on the size of your workforce). Find notice requirements under the WARN Act from the Department of Labor.

Also, check state labor law requirements about wage continuation and warnings requirements.

Practical considerations

It’s been reported that 78% of full-time workers in the U.S. live paycheck to paycheck. Even if you aren’t required by law to continue workers’ wages during a temporary shutdown, you may want to do so to help your staff during a difficult time.

You may recall the story in the 1990’s about a textile mill owner who paid his 3,000 workers their full wages for 60 days after the mill burned to the ground, costing him $25 million. As he said, “I think it was a wise business decision, but that isn’t why I did it. I did it because it was the right thing to do.”

But how can a small business owner afford to continue paying workers? It may be difficult to do, but here are some options to help:

  • Create your own disaster emergency fund. Use retained earnings to cover wages and other disaster-related costs.
  • Carry business interruption/continuation coverage. This insurance pays your overhead, including wages and payroll taxes, during a shutdown (up to the limits of the policy).
  • Check for tax breaks. The Disaster Tax Relief and Airport and Airway Extension Act of 2017 offers eligible employers an employee retention tax credit of 40% of wages (up to $6,000 can be taken into account).

Conclusion

If you have legal concerns about whether and to what extent you must continue wages, consult with an employment law attorney. The cost of the consultation is less than penalties you could receive for violating the law.

Tags disaster emergency fund emergency shutdowns federal law requirements labor laws small business employees temporary shutdown

Primary Sidebar

Categories

  • General Business (506)
  • Guest Blog (113)
  • Homepage (24)
  • Small Business (1,004)
  • SMB Financial (329)
  • SMB Legal (67)
  • SMB Taxes (326)

Barbara’s Recent Posts

  • What the U.S. Supreme Court Told Small Businesses in This Term: Part 1 July 3, 2025
  • Mid-Year Business Planning for 2025 July 1, 2025
  • 10 Ideas for Coping with Cash Flow Challenges June 26, 2025
  • 5 Insurance Traps to Avoid June 24, 2025
  • Creating a Feng Shui Office Layout for Your Business June 20, 2025
  • Scaling Your Business by Optimizing Social Media Marketing June 19, 2025
  • The Timeless Value of Business Cards in a Digital World June 18, 2025
  • What Does the Latest IRS Data Book Tell Us? June 17, 2025
  • Business Advice from Famous Dads June 12, 2025
  • How Important Is Higher Education for Small Business Owners June 11, 2025
  • Business Planning in a Period of Uncertainty June 10, 2025
  • 9 Smart Financial Decisions for Business Owners in Retirement June 6, 2025
Awarded Top 100 Small Business Blog medal (link will open in a new window or tab)
Marquis Who's Who 2023 Badge
Top Small Business Blogs (Link will open in a new window or tab.)
8 Financial blogs small business Owners Need to Read. Invoice home.  (link will open in a new window or tab)
Best Small Business Blog, Expertido.org
Top 50 Small Business Blogs 2018
Best Small Business Blogs
BizHumm Top 100 Business Blog Award to Barbara Weltman
FitsSmallBusiness.com: Award for Best Small Business Blog 2017 (link will open in a new window or tab)
FitsSmallBusiness.com: Award for Best Small Business Blog 2016 (link will open in a new window or tab)

Footer

Big Ideas for Small Business logo

Small business ideas, business tax news and small business consulting from Barbara Weltman to provide business owners with the information they need to succeed. Visit our small business blog, Idea of The Day®, small business books and articles on small business taxes, small business finance and small business legal advice.

Contact Us

[email protected]

(772) 492-9593

gacor maxwin situs slot thailand terpercaya situs slot gacor situs gacor akun pro thailand slot bandar togel terpercaya

Latest Tweets

bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
July 4

New Ecommerce Tools: July 3, 2025 https://bit.ly/3TTvrxh #ecommerce

Reply on Twitter 1941263347644498047 Retweet on Twitter 1941263347644498047 Like on Twitter 1941263347644498047 Twitter 1941263347644498047
bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
July 4

Tariffs Trigger the Sharpest Drop in Online Spending in Over a Decade https://bit.ly/44drREi

Reply on Twitter 1941227365117407242 Retweet on Twitter 1941227365117407242 Like on Twitter 1941227365117407242 Twitter 1941227365117407242
bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
July 4

Mid-Year Business Planning for 2025 -With uncertainty still high, what are your plans for the second half of the year? https://bit.ly/40zxs5s #smallbusiness #bizplanning #midyear

Reply on Twitter 1941166899481456820 Retweet on Twitter 1941166899481456820 Like on Twitter 1941166899481456820 Twitter 1941166899481456820
Load More

Copyright © 2008–2025 Big Ideas for Small Business, Inc  |  Designed by Hudson Fusion

  • Privacy Policy
  • Sitemap