The Sept. 11 catastrophe forces a look at a whole set of legal issues with which employers are rusty at best, or unfamiliar altogether. Consider the following:

Reporting time pay

In California, employers must pay employees who showed up for work and could not work due to terrorist activity on Sept. 11, as set forth below.

If you sent non-exempt employees home because civil authorities ordered an evacuation/shutdown, or because of factors beyond your control, such as a building closure, you are obligated to pay only for the time the employees actually worked, if at all.

If the company voluntarily decided to send non-exempt employees home, California's reporting time pay penalty would be triggered. Reporting time pay is owed when an employee reports to work at the regularly scheduled time, but is not put to work or is given less than half the regularly scheduled workday. In this case, you would have to pay for half of the scheduled work hours, at no less than two and not more than four hours pay. Obviously, if you were able to reach any non-exempt employees before the start of their shift to advise them not to report for work, you need not pay them.

Because employers must pay exempt employees for a whole week if they work any portion of that week, you must pay exempt employees if you sent them home for one day due to factors beyond your control.

Payroll

Technically, California employers are obligated to pay employees on their regularly scheduled pay-days, despite acts of God, war or terrorism. Penalties for late paychecks are up to $100 per employee per pay period plus 25 percent of the wages not timely paid to each employee. However, it seems doubtful that the Labor Commissioner would impose penalties if any employer could prove paychecks were late as a direct result of an unexpected and tragic event, which is clearly out of the employer's control.

Travel time

If a non-exempt employee was on a business trip at the time of the attack, you are not obligated to pay wages for the extra time it may have taken to return home unless the employee was working during that time. However, you must pay non-exempt employees for hours they spent actually working or traveling home, and you must pay exempt employees for the full week if they worked during that week.

California's Labor Code requires employers to reimburse employees for all expenses incurred in performing their duties, such as mileage, travel, and meals. Employers should be prepared to pay all necessary expenses for the employee to return home, even if the expenses are unanticipated.

Military leave

In connection with the United States' military response to the Sept. 11 attacks, many reservists and members of the National Guard have already been called to active duty or put on notice that they may be called in the near future. Employers must be prepared, therefore, to comply with military service laws if their employees are called to active duty.

The Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA") grants certain benefits and job protection for individuals returning from "uniformed" military service. USERRA defines "uniformed services" to include active and full-time reserve duty in the Army, Navy, Marine Corps, Air Force, Coast Guard, Public Health Service and other categories designated by the President.

Employers may not refuse to grant unpaid leave for employees called to such active duty, and must reinstate employees to the same or similar position (i.e., same seniority, status, and pay) for a period of up to five years from the date the leave commenced. The five-year period is cumulative for all leave periods due to military service.

Employers need not continue benefits during this period, but of course must make available COBRA coverage to participants out on military leave, and must treat returning employees as though there was no break in service for purposes of pension rights. Employers may not terminate the employment of a worker returning from leave, except for good cause, for a period of six months (if the leave is less than six months) or one year (if the leave was more than six months).

Family medical and care leave

An employee may be eligible for family leave to care for a child, parent, or spouse who has a serious health condition resulting from the terrorist attack, as well as their own problems. To be eligible for family leave the employee must:

- Work for a company covered by family leave laws (50 or more employees in a 75 mile radius, and all public employers), and

- Be eligible for family leave (worked for you for at least 1,250 hours in the past 12 months at a worksite with 50 or more employees either at the worksite or within 75 road miles), and

- Not have exhausted his/her family leave entitlement for this 12-month period.

Further, the employee must be truly needed to care for the ill family member. No FMLA leave will begin to run until the employer so designates it in writing, to the employee.

While there are no federal or state laws requiring employers to provide bereavement, funeral, or similar leaves, many companies do have such policies, or personal leave policies.

Counseling

Many employees are feeling the emotional strain of these recent events, and tempers may be thin or depression apparent. Keep your door open to employees, and encourage the use of any employee assistance programs you have available. Pulling together will help us all get through this time and continue on with business.

Beth Schroeder is partner and chair of the Employment & Labor Law Department at the Century City law firm of Silver & Freedman. John LeCrone is senior counsel in the Employment & Labor Law Department.

Entrepreneur's Notebook is a regular column contributed by EC2, The Annenberg Incubator Project, a center for multimedia and electronic communications at the University of Southern California. Contact James Klein at (213) 743-1759 with feedback and topic suggestions.

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