How to calculate pay for employees during a temporary business closure?
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How to calculate pay for employees during a temporary business closure?
I am employed in an 8 employee salon that is closing for 2 weeks for renovations. Employees were given at least 60 days notice of these renovations. The main renovation is replacing the roof of the salon, which the salon owner negotiated with the landlord when re-signing the salon lease for this year. The landlord is paying for and responsible for the roof portion of renovations. Our salon owner has arranged for some interior renovations to be taking place at the same time, which the owner is funding. All stylists at the salon are employees. We have a confusing pay structure where everyone has a small salary for the month most employees are salaried at $500 and then employees do not start to make a percentage of commission in a tiered commission structure off their hair service sales until their individual service sales are over $2,000. This system was designed to somehow guarantee all the stylists are making at least minimum wage for 32 hours of work according to the salon owner. While the salon is closed for renovations, each stylist will be unable to work for 2 weeks. The salon owner said the only compensation employees will be receiving is 1/4 of their salary, $125, despite being closed for 1/2 the month. The salon owner said they will not be adjusting the commission system to start earning a commission at a lower service sale target after re-opening that month. The employees will still need to do at least $2,000 in hair service sales in the remaining 2 weeks of the month after renovations to make any commission beyond the remaining salary for that month. If an employee doesn’t meet the $2,000 sales target presumably compensation for the 2 remaining weeks of the month after renovations would be $250, $518 additional needed to bump employee up to minimum wage pay for 64 hours of work, for $768. Meaning employees will have made $893 for the month before taxes. Does this all sound correct and legal? I can’t find information on employee wage law concerning temporary closures of business.
Asked on May 21, 2019 under Employment Labor Law, Oregon
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
There is no need to pay anything all to employees when a business is closed, unless the employees had a contract guarantying them pay at that time. Without a contractual guaranty of pay for not working, businesses don't need to pay them during closures: after all, they are paid to work, so no work, no pay.
Any work they do when not closed needs to be at least at minimum wage--no exceptions (e.g. under the Fair Labor Standards Act). So if due to the commission structure they make less than minimum during the remainder of that month, they would have a wage and hour complaint which they could bring to the department of labor.
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