Can a Company Close for a Day and Not Pay Employees?

Whether a company can close for a day and not pay employees depends entirely on how you’re classified. If you’re hourly (non-exempt), your employer generally owes you nothing for a day you didn’t work. If you’re salaried and exempt from overtime, the rule flips: as long as you performed any work during that workweek, your employer must pay your full weekly salary, even if the office was dark for a day or two in the middle.

Hourly Employees Aren’t Paid for the Closed Day

The Fair Labor Standards Act requires employers to pay non-exempt workers at least the federal minimum wage for hours actually worked, plus overtime past 40 hours in a workweek.¹ The DOL has confirmed directly that the FLSA does not require employers to pay non-exempt employees for hours they did not work.²

That covers planned maintenance days, weather closures, and unexpected shutdowns alike. Your paycheck simply reflects one fewer day of hours.

One situation cuts the other way. If you show up for your scheduled shift and the employer sends you home because it decided to close, some states require a minimum “reporting time” payment. About eight states and the District of Columbia have such rules, typically two to four hours of pay. There’s no federal reporting-time law, so whether you’re owed anything for the trip depends on where you work.

Salaried Exempt Employees Get the Full Week

Exempt employees are salaried workers who meet specific job-duty tests and earn at least $684 per week, or $35,568 annually. That’s the threshold the DOL is currently enforcing after a federal court vacated a 2024 rule that would have raised it.³ Clear both the salary and duties tests and you’re exempt from overtime and minimum-wage protections.⁴

That classification carries a protection called the salary basis rule. Your predetermined pay cannot be reduced because of variations in the quantity of work you perform. If you do any work during a workweek, your employer must pay your full salary for that entire week, regardless of how many days or hours you actually put in.⁵

The regulation is explicit about closures the employer chooses. Deductions from an exempt employee’s pay are not allowed for absences caused by the employer or by the operating requirements of the business. If you’re ready, willing, and able to work and the company shuts down anyway, the company absorbs that cost.⁵

The Bar for “Any Work” Is Low

Checking email from home, joining a short call, or reviewing a document during a closure day all count as performing work that week. Once you’ve done any of it, your employer owes the full weekly salary.⁶ Many exempt employees stay loosely connected during closures without thinking about it, and that connection is enough.

Deductions the Employer Can Make

Narrow situations do allow an employer to dock an exempt employee’s salary, and none of them involve the employer choosing to close:

Full-day personal absences unrelated to sickness.
Full-day sick leave, if the employer has a bona fide policy providing compensation for illness-related absences.
Unpaid FMLA leave.
Penalties for infractions of safety rules of major significance.
Full-day unpaid disciplinary suspensions under a written policy applied to all employees.

The dividing line is who made the call. An employee choosing to be absent is treated differently from the employer closing the office; when the company decides, it bears the cost.⁵

Can Your Employer Make You Use PTO?

No federal law requires employers to offer paid time off at all, so PTO rules come mostly from company policy and, in some places, state law.

Employers can require exempt employees to use accrued PTO or vacation to cover a closure day. The DOL has confirmed that substituting accrued leave for an employer-directed absence does not violate the salary basis rule, as long as the employee still receives pay equal to the full predetermined salary for any week in which work is performed.² The important piece: if an exempt employee has exhausted PTO but worked any part of that week, the employer still owes the full weekly salary. It can run the leave balance negative; it cannot reduce the actual paycheck.

For non-exempt employees, employers can similarly require PTO usage during a closure if company policy allows it. Because hourly workers are only owed pay for hours worked, using PTO just replaces what would otherwise be unpaid time.

Holiday Closures Work the Same Way

The FLSA does not require payment for time not worked, including holidays.⁷ Holiday pay is a matter of agreement between employer and employee, not a legal mandate.

For exempt employees, the salary basis rule still governs. A holiday falling inside a week you otherwise worked doesn’t reduce your salary because there’s nothing to deduct. For non-exempt employees, holiday pay is purely a company benefit. Some employers pay time-and-a-half for working on a holiday, but the FLSA doesn’t require it.

What If the Closure Lasts a Full Workweek

The full-pay rule has a clean edge: the workweek. If an exempt employee performs no work whatsoever during an entire workweek because the company is closed, the employer has no obligation to pay salary for that week.² The regulation puts it plainly: exempt employees need not be paid for any workweek in which they perform no work.⁵

If Your Employer Docked Your Pay Anyway

Improperly deducting from an exempt employee’s salary during a company-initiated closure isn’t just a back-pay problem. It can cost the employer the exemption itself.

Under federal regulations, an employer who makes improper deductions can lose the overtime exemption if the deductions reflect an actual practice rather than an isolated mistake. When the exemption is lost, it’s lost for every employee in the same job classification working under the same managers responsible for the improper deductions, not just the person who complained.⁸ Retroactive overtime for an entire department can follow.

A safe harbor exists. If the employer has a clearly communicated written policy prohibiting improper deductions, provides a complaint mechanism, reimburses employees for mistakes, and commits to future compliance, isolated deductions won’t destroy the exemption.⁸ The safe harbor collapses if the employer keeps docking pay after receiving complaints. The DOL specifically lists deducting a day’s pay because the employer closed for bad weather as an example of an improper deduction.⁹

If you believe your salary was improperly reduced for a closure day, raise it in writing with your employer first. If that doesn’t resolve it, you can file a complaint with the DOL’s Wage and Hour Division.

State Laws Can Add More

Federal law sets the floor. Several kinds of state rules can give you more than the FLSA on its own.

Reporting Time Pay

A handful of states require employers to pay non-exempt employees a minimum number of hours, commonly two to four, when they show up for a scheduled shift and get sent home because of a closure. If your state has such a law and you drove in only to find the doors locked, you’re likely owed at least partial pay for the trip.

Predictive Scheduling Laws

A growing number of cities and states have predictive scheduling laws, primarily covering retail, hospitality, and food service. These often require advance notice of schedule changes, and canceling a shift at the last minute for a closure can trigger a penalty payment to the affected employee.¹⁰ Notice periods and penalty amounts depend on the local law.

Stricter Classification Rules

Some states impose higher salary thresholds for the exempt classification than federal law. An employee who qualifies as exempt under the FLSA may still be non-exempt under state rules, which puts them squarely in the “no work, no pay” hourly framework for a closure day. Collective bargaining agreements can also spell out closure-specific pay guarantees that go beyond the federal minimum.

1
U.S. Department of Labor. Wages and the Fair Labor Standards Act
2
U.S. Department of Labor. Fact Sheet 70 – Frequently Asked Questions Regarding Furloughs and Other Reductions in Pay and Hours Worked Issues
3
U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption from Minimum Wage and Overtime Protections Under the FLSA
4
U.S. Department of Labor. Fact Sheet 17A – Exemption for Executive, Administrative, Professional, Computer and Outside Sales Employees Under the Fair Labor Standards Act
5
eCFR. Title 29 CFR 541.602 – Salary Basis
6
U.S. Department of Labor. Fact Sheet 17G – Salary Basis Requirement and the Part 541 Exemptions Under the Fair Labor Standards Act
7
U.S. Department of Labor. Holiday Pay
8
eCFR. Title 29 CFR 541.603 – Effect of Improper Deductions from Salary
9
U.S. Department of Labor. FLSA Overtime Security Advisor
10
U.S. Department of Labor. Fact Sheet 56B – State and Local Scheduling Law Penalties and the Regular Rate Under the Fair Labor Standards Act