Power Outages Hit California: What Employers Need to Know

Posted by: Gail Cecchettini Whaley J.D. on Wednesday, October 9, 2019

PG&E announced that it will shut-off power to approximately 800,000 customers in Northern California starting this week, with many of those outages already underway. Outages will vary from location-to-location, but in some cases could last several days.

High winds are expected in California over the next several days, and these outages are an attempt by PG&E to avoid the deadly wildfires that occurred over the last couple of years resulting in loss of life and property.

If you are a business affected by the power outage, here are some things to know.

Paying Employees: Non-Exempt vs. Exempt

If the power is out and work is shut-down there are several factors to keep in mind.

Non-exempt employees are only paid for hours actually worked. In other words, businesses are not required to pay non-exempt employees if they are not working, including times when the employer closes its doors or reduces hours of operation due to public utility outages.

If your business shuts down because public utilities (electricity, water, gas, sewer) fail, you are not required to pay non-exempt employees. Likewise, if employees are at work and then sent home due to a power outage, you only have to pay the non-exempt employees for hours actually worked. Reporting time pay is not owed to non-exempt employees when public utilities fail.

Nonetheless, you are always free to pay non-exempt employees for that time, and may also permit them to use their paid sick leave time or vacation time. Decide how you plan to handle this issue and communicate it to employees.

The rules are different for exempt salaried employees. Employers must pay exempt employees a full weekly salary for any week in which any work is performed, with a few limited exceptions (for more details review our fact sheet). If the business is closed for the entire week, employers don’t need to pay exempt employees.

On-Call and Waiting Time Pay

What if I want my employee to stay on-site to wait out the power outage? In most cases, any employee who is required to remain at the employer's premises or close by—and therefore unable to use that time for his or her own benefit—must be compensated for that time. When you "restrict" an employee's time, they are eligible for compensation.

Unusual Remote Work

If the employee has power at home but not at work, make a decision regarding whether you are going to allow remote work. Remember, any employee who performs work for the business, such as taking phone calls or answering e-mails, must be compensated for that time even if done away from the office.


Safety issues should also be kept in mind if a power outage occurs. If you plan to be open until the power is shut-down, there are several things to keep in mind.

Make sure you have taken all safety measures to prevent accidents—such as emergency lighting (portable lights, flashlights, etc.).

Work areas should also be free from obstructions—allowing for safe movement and exits.

Make sure to manually turn off any equipment that was running at the time of the outage so that it doesn't automatically reboot when the power is restored. Take other steps to prevent hazards that may occur when machinery is restarted.

Once power is restored, do a quick safety inspection to make sure equipment is properly operating and no hazards are present.

Advance Planning

With California wildfire season upon us, these situations may become more common. Take time for advance planning regarding the issues that occur when the power is out or a natural disaster strikes:

  • Communicating with employees
  • Paying employees
  • On-call requirements
  • Remote work
  • Safety

Let CEA Help You. Members have access to HR Directors that can help guide them through these situations (800-399-5331). CEA can also help you develop your Emergency Action Plan as part of your required Injury Illness and Prevention Program.


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