Temporary business closure: pay, notice and employees

What employers need to think about when closing temporarily for weather, renovations, emergencies or a slow season: paying hourly and salaried staff, notice rules including the WARN Act, benefits, communication and reopening.

⏱ 8 min readUpdated November 2026Business closures

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Found it: the reopening textWrite the ‘we are reopening’ message before you close, with blanks for the date. You will be busy when the day comes.
In shortWhen a business closes temporarily, non-exempt hourly employees generally must be paid only for time they actually work, although some states require reporting time pay if employees arrive for a shift and are sent home. Exempt salaried employees generally must receive their full salary for any workweek in which they do any work, even if the business closes for part of the week. Longer closures can trigger federal WARN Act notice obligations for larger employers, and state laws may add more. Communicate early and in writing, and plan reopening before you close.
Key takeaways

Common reasons for temporary closures

Businesses close temporarily for many reasons: severe weather, a power or water outage, renovations, an equipment failure, a public health emergency, a slow season or a cash-flow problem. Some closures last a day; others last weeks or months. The legal and practical questions are similar: who gets paid, what notice is required and how to bring people back. For weather specifically, see our inclement weather policy guide.

Paying non-exempt hourly employees

Under federal law, non-exempt employees must be paid for the hours they actually work. If the business is closed and they do not work, federal law generally does not require pay. But several points matter:

Paying exempt salaried employees

To keep their exempt status, salaried exempt employees generally must receive their full salary for any workweek in which they perform any work, regardless of the number of days or hours worked. That means:

See exempt vs. non-exempt employees for the classification rules.

The WARN Act and notice rules

The federal Worker Adjustment and Retraining Notification (WARN) Act generally applies to employers with 100 or more full-time employees. It requires 60 days’ written notice before a plant closing or mass layoff that meets its thresholds. A short temporary closure is usually not covered, but a layoff that is expected to be temporary can become covered if it lasts longer than six months, unless specific conditions are met. Exceptions exist for unforeseeable business circumstances and natural disasters, but notice must still be given as soon as practicable.

Several states, including California, New York, New Jersey and Illinois, have their own “mini-WARN” laws, often with lower thresholds or longer notice periods. If your closure could last for months or affect many employees, get legal advice early.

Benefits, unemployment and furloughs

A temporary closure without pay is often called a furlough. Key questions:

Is it a closure or a termination?

Be clear about whether employees remain employed during the closure. If you end employment, final paycheck deadlines apply, which can be very short in some states. See final paycheck rules. If employees remain employed on temporary layoff, say so in writing, with the expected return date if known. Some states treat a layoff without a specific return date as a termination for final pay purposes, so check your state’s rules.

The DOL rules behind closure pay and notice

Three federal rules decide most closure questions:

The first rule is the one owners most often trip on. If a salaried manager answers a few emails during a closure week, they are generally owed the full week’s salary. Either tell exempt staff clearly not to work during a full-week closure, or plan to pay them.

A communication checklist

Closure communication checklist complete.

Customers and suppliers also need to know. Post notices, update your hours online and pause deliveries.

A worked example

A cafe closes Monday to Wednesday for repairs and reopens Thursday. Its hourly staff are not scheduled and do no work Monday to Wednesday, so they are paid only for their Thursday to Sunday shifts. One barista is asked to come in Tuesday to help move equipment for three hours; those three hours must be recorded and paid. The salaried exempt manager works Thursday to Sunday and also answered supplier emails on Monday, so she receives her full weekly salary. If the cafe tried to pay her only four-sevenths of her salary, it would risk her exempt status.

Plan the reopening

Reopening is easier when planned before you close. Decide which roles return first, publish schedules early and contact employees to confirm availability. Some may have found other work; plan for gaps with open shifts or new hiring. Review safety and equipment before reopening, and complete any required inspections. Our opening plan checklist can be adapted to other businesses.

EZTime helps during closures and reopenings: announcements reach every employee by app notification or SMS, schedules can be republished quickly and time tracking captures any work done while closed so it is paid correctly.

Frequently asked questions

Do I have to pay hourly employees if my business closes temporarily?

Under federal law, non-exempt employees generally must be paid only for hours worked. Some states require reporting time pay if employees arrive for a shift and are sent home, and some cities require premiums for late schedule changes, with exceptions for emergencies.

Do I have to pay salaried employees during a closure?

Exempt employees generally must receive their full weekly salary for any workweek in which they do any work. If the business is closed for a full week and they do no work at all, salary generally does not have to be paid for that week.

Can I make employees use PTO during a closure?

Often yes, depending on your policy and state law. For exempt employees, you can generally require use of accrued leave, but they must still receive full salary if leave runs out in a week they work.

Does the WARN Act apply to a temporary closure?

Usually not for short closures, but it can apply to employers with 100 or more employees if a closure or layoff meets its thresholds, including temporary layoffs that extend beyond six months. Several states have their own notice laws.

Can employees collect unemployment during a temporary closure?

In many states employees on temporary layoff or reduced hours may be eligible for unemployment benefits. Eligibility rules and waiting periods vary by state.

What is the difference between a furlough and a layoff?

A furlough is a temporary, unpaid leave or reduction in hours with an expectation of return. A layoff is a separation from employment, which may or may not be temporary. The difference affects benefits, notice rules and unemployment, so use the right term in your communications.

What happens to employee benefits during a furlough?

It depends on your plans. Many employers keep health coverage during a short furlough, sometimes with the employee’s share collected later. Check plan documents and talk to your benefits provider before announcing anything.

Where to go next

Related guides and tools

Reach everyone in one message

EZTime announcements go out by app or SMS to the locations, departments or roles affected, so closure and reopening updates reach every shift.

Disclaimer: This guide on business closures is general information, not legal advice. Pay, notice, unemployment and benefits rules vary by state and depend on the facts of the closure. Consult an employment attorney before a closure that could last weeks or affect many employees.