The potential arrival of Hurricane Sandy in New England on Monday and Tuesday is prompting employers throughout the region to revisit disaster-preparation plans honed in recent years by tornadoes, flooding and freak snowstorms.

“The overriding concern of employers must be the safety and well-being of employees and their families. The willingness of an employer to recognize that employees may be distracted for a day or two dealing with a natural disaster creates a good measure of loyalty in the long run,” said Gary MacDonald, Executive Vice President of the AIM Employer’s Resource Group.

The Massachusetts Emergency Management Agency (MEMA) offers the following recommendations for employers preparing for a storm:

• Review your property insurance with your insurance agent. Take photographs or make a video of your business establishment, both inside and outside.
• Determine and establish a written Hurricane Preparedness Plan for your business and its contents. Coordinate this plan with local and state officials.  Specify the conditions under which the plan will be implemented.
• Test your plan, reviewing it annually. Establish an employee-training program of your Hurricane Plan.
• Make plans for protection of your computer files, including an off-site back-up system to secure and safely store data.
• Protect corporate records, keeping duplicates at an alternate location.
• Well in advance, acquire emergency protective equipment and supplies. Heavy plastic sheeting, duct tape, sandbags, emergency generator, chain saw and large pieces of plywood will help protect your property.
• As storms approach, remember to bring in display racks and other objects, such as trashcans that might cause damage if airborne.  Remove outdoor signs, especially those that swing or are portable.
• Move merchandise, equipment or furniture away from windows or skylights. Elevate boxes or equipment, if possible.
• Turn off electricity and disconnect all electrical appliances and equipment (except for refrigeration equipment), in case there is a power outage.  An ensuing power surge, once power is restored, could be damaging to connected equipment.
• Inform all employees on when and how you will notify them to report back to work.
• Develop an employee identification system, such as picture ID badges. This may help employees gain access to the area after a hurricane.
• If possible, make arrangements to pay employees in cash.  It may be several days before banking institutions are operational.

How do you determine what to pay workers if your company is shut down for any period of time?

Massachusetts regulations define reporting pay this way: “When an employee who is scheduled to work three or more hours reports for duty . . . and that employee is not provided with the expected hours of work, the employee shall be paid for at least three hours on such day at no less than the basic minimum wage.”

Here are specific examples:

• A non-exempt (hourly) employee reports for work, but the company is closed – The employer must pay the employee at least $24 in wages (3 hours x minimum wage).
• A non-exempt employee reports for work, the company opens for a short period and then closes – The employee must be paid actual wages for time worked and minimum wage for remaining time, up to 3 hours.
• A non-exempt retail employee reports for work on a Sunday (law requires 1.5 times base pay for Sunday and holidays) – The employee must be paid at least $36 (3 hours x Sunday minimum wage of $12 per hour).
• Exempt employees – Employers may not deduct time from an exempt employee’s pay when closing early due to the weather. Any unauthorized deduction runs the risk of losing exempt status.

Many companies find it too difficult to rely on managers to reach all employees in a timely fashion before they report to work. Employers wishing to avoid this problem should consider establishing a phone message loop and require that all employees call into the message system before leaving their house if there is a risk of closing due to the weather.

Put the requirement in your handbook and make sure all employees are aware of it. And then enforce the rule. That means that if someone ignores it and reports to work when you were closed, you will owe the employee show-up pay, but you may also discipline the employee for violating the policy.

Alternatively, employers should use local media (radio and television) to communicate that they are closed. While you may also post the closing notice on your Web site, remember that asking employees to check the Web site/email prior to leaving for work may invite requests to be paid for that time by non-exempt employees.

Although an employer is required to pay only minimum wage, many companies elect to pay employees their actual wage for the three or four hours (half day pay) in the interest of employee relations. Most AIM members pay more than minimum wage. According to the AIM’s Statewide Compensation Survey:

• 34 percent of employers pay four hours, with most paying regular wages;
• 28 percent pay 3 hours, with most paying regular wages;
• 15 percent pay more than four hours, with most paying regular wages; and
• The remaining 23 percent report other pay practices.

If a non-exempt employee wants to be paid for the balance of the day (5 hours), allow the employee to charge paid time off to make up for the lost pay.

AIM will be in contact with state officials throughout any storm, and will communicate information on this new blog, and on Twitter, @aimbusinessnews, #MASandy, #Sandy, #HurricaneSandy. Here are other resources for employers:

Massachusetts Emergency Management Agency (MEMA)

National Hurricane Center

NOAA nowCoast

AIM Download | Model Disaster Preparation Plan for Business