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Dilemma of the Month: Do I Need to Pay Employees When the Power Goes Out?

Back Article Jun 9, 2022 By Suzanne Lucas

I’m running into a weird problem with employees working from home: power and internet outages. California will undoubtedly have rolling blackouts again, plus unexpected outages. My employees do customer service over the phone. They cannot work without power and the internet. Do I have to pay them when the power goes out? Can I make them verify that their internet is out? Can I require them to tether their computers to their phones if their internet goes out?

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Let’s start with the most straightforward question first: Can you require them to use their personal phones if their internet goes out? The answer is yes, if you are paying for their phones. California requires that businesses pay all business expenses. You can’t pass it on to the employee. So if you want to go this route, you’ll need to pay for their cell phones — at least a prorated amount for the time they use them.

The second most straightforward question is, can you require them to verify their internet or power outage? Yes, but do you want to? You know power goes out regularly, and I promise, if they lie about this, their performance issues will show up in other ways. Focus on performance.

California has a blackout problem, and even with new plans in place to reduce blackouts, you can guarantee the power will be going off at some point. You are wise to think about this problem before summer temperatures rise or fire season starts. Here’s what you need to know.

Engaged to wait or waiting to be engaged?

You know, of course, that your hourly employees have to be paid for every hour worked and they have to receive overtime for working more than eight hours in a day or 40 hours in a week. That part is clear. But what about when the power goes out, and they can’t work?

There are two different situations your employees could be in with a power outage, and the situation determines if you have to pay. 

The first is when they are “engaged to wait” or, in California lingo, “call back time.” If you expect them to be available to jump right back on the minute the power returns after a blackout, so they can’t leave the house, then you must pay them. They are waiting to be called back and not relieved of duty.

Their time isn’t their own. Consider it like a receptionist who has to stay at the desk regardless of whether there is a customer in the lobby. The receptionist may be surfing the web, reading a book or chatting on the phone with a friend, but can’t go home.

The second is “waiting to be engaged” or “standby time.” In this situation, you say, “Power is off. You are free to do what you want, and check back in three hours.” In this situation, even if the power turns back on, you can’t punish the employees for not being at their desks. They need to be free to do what they want to do. Legally, they don’t need to be paid for this time.

Create your policy

A few things could make sense, depending on your situation. If your work-at-home employees are spread throughout the state, a blackout in one area shouldn’t be too much of a hardship. If everyone is in the same region, you’ll have fewer blackouts to handle, but everyone will be out of work when you do.

Here’s what you need to think about (besides the legal aspects) when making your policies.

Keeping your employees happy is very important. Your employees work for you because they need money. This means you probably need to err on the side of paying them even when you don’t legally have to.

You can mix and match. For an unplanned blackout, say, “We expect you to be ‘engaged to wait’ for the first hour. If the power comes back on, then great, back to work! If not, you’re relieved after one hour and can come back for your next scheduled shift.” You pay for the first hour, but not the following ones.

Give them a choice. Let them know that if they want to come back to work as soon as the power goes back, they can, but they don’t have to come back until their next scheduled shift. That way, they are relieved from work (waiting to be engaged), and you don’t have to pay them for time not working, but they can come back if the power comes back on to not miss out on as much lost pay.

Let them make up hours missed due to power outages. Predictable, full paychecks are essential to your employees. Find a way to let them get all their hours in. (Of course, employees working is critical to your business success as well, so this goes both ways!)

Schedule around rolling blackouts. If the power outage is scheduled, work with your employees to create plans for them.

Most experts, including Cal Fire, predict that California’s 2022 fire season will be a tough one, and summer is sure to be hot — two situations that can lead to power outages. Planning and speaking with your employees before the blackouts is the best way to handle it when the lights — and computers — eventually go dark.

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