Last Updated on February 26, 2026 by MyHRConcierge

When winter storms roll in, job sites shut down, roads ice over and employers are forced to make quick decisions: close operations, delay shifts or send the crew home. In industries where work depends on safe outdoor conditions- construction, energy, environmental services- a snowstorm doesn’t just disrupt schedules; it disrupts payroll.

But when employees are paid for days they don’t work because of inclement weather, how does that compensation factor into overtime calculations under the Fair Labor Standards Act (FLSA)? Can employers exclude “weather pay” from the regular rate? Can those payments offset overtime owed?

Those were not hypothetical questions in Acosta v. TEAM Environmental LLC. They were multi-million-dollar questions. Read further to examine how a federal court addressed the intersection of inclement weather pay and the FLSA’s regular-rate requirements, and what employers should learn before the next storm hits.

Case Overview: Facts and Procedural Posture

In Acosta v. TEAM Environmental LLC, the United States Department of Labor (DOL), under then-Secretary R. Alexander Acosta, filed a lawsuit against TEAM Environmental LLC, a West Virginia-based environmental services and natural gas industry contractor, alleging violations of the FLSA’s overtime provisions. The lawsuit was initiated in the Southern District of West Virginia on October 20, 2016.

The DOL’s core claim was simple but significant: TEAM failed to pay overtime compensation at the legally required rate of “one and one-half times the regular rate of pay” to its non-exempt employees for hours worked over 40 in a workweek, as required by 29 U.S.C. § 207(a)(1).

After procedural motions and briefing, the court granted the Secretary’s motion for partial summary judgment on December 29, 2017, holding that TEAM had violated the FLSA by failing to properly compute overtime and owed overtime compensation and liquidated damages.

However, even after liability was established, the parties disputed how to calculate damages, especially considering certain kinds of non-work pay TEAM had provided; particularly pay for inclement weather days (“weather days”) and “guaranteed days” when employees were paid despite not physically working.

Legal Issues at Stake

Although Acosta was not an exemption case (i.e., it did not turn on whether employees were exempt or non-exempt from the FLSA), it raised two key issues of wage and hour law that many businesses don’t evaluate every day:

Regular Rate and Non-Work Pay

The FLSA requires that overtime be calculated based on an employee’s regular rate of pay, which generally includes “all remuneration for employment paid to, or on behalf of, the employee,” with some exceptions.

TEAM paid its inspectors a daily rate and, on some days when employees couldn’t work due to inclement weather, provided pay anyway. Team argued that these payments should be excluded from the regular rate when calculating overtime.

The court examined the relevant text of the FLSA and the Department of Labor’s regulations, which allows for exclusion of certain infrequent or sporadic payments from the regular rate. Inclement weather payments- described in the DOL regulations as “occasional, sporadically recurring situations where the employee would normally be working but for… weather conditions affecting the ability… to perform the work”- qualified for that exclusion. Thus, the court held that payments for occasional weather days may be excluded from the total compensation used to compute the regular rate.

By contrast, “guaranteed days” pay, where a worker was regularly paid for a day the employee was not required to work as part of a contractual guaranteed schedule, did not qualify as occasional or sporadic and therefore must be included in the regular rate computation.

Crediting Non-Work Pay Against Overtime

Another key issue was whether Team could credit payments for weather or guaranteed non-work time against its overtime obligations. An employer can credit certain premium payments against overtime under a narrow set of circumstances. But, the court agreed with the Secretary that neither weather day pay nor guaranteed day pay could be used as such a credit, even if excluded from the regular rate, because the statute’s credit provisions are limited and do not cover these types of remuneration.

Inclement Weather and the FLSA: Context

Acosta v. TEAM Environmental LLC illustrates broader principles about how the FLSA treats pay for time not actually worked- particularly in circumstances beyond the employee’s control, such as inclement weather.

It’s important to remember that the FLSA does not require employers to pay employees for hours not worked (such as paid leave, vacation, holidays, or weather closures); rather, it focuses on how pay received must be treated if it is given. In other words:

• If an employer chooses to provide pay for unscheduled absences (like inclement weather), that pay must be included in the regular-rate calculation, unless it falls under an express statutory or regulatory exclusion.
• Some payments (like occasional weather day pay) can be excluded from the regular rate, but such exclusions are narrow and fact dependent.
• Other non-work pay (like guaranteed days payments) generally cannot be excluded and must be included in the regular rate for overtime.

The Outcome and Broader Impact

After the court’s rulings on summary judgment and evidentiary issues, TEAM ultimately settled the case, agreeing to pay $3.65 million in back pay and damages for hundreds of affected workers.

Although Acosta did not produce a landmark appellate decision, it is valuable for employers because it clarifies how courts interpret weather-related pay under the FLSA, it reinforces that employers must carefully consider what counts toward the regular rate of pay, and it underscores that internal payroll practices can have significant consequences if they are inconsistent with FLSA requirements.

Before the Next Storm Hits

Acosta v. TEAM Environmental LLC serves as a practical reminder that wage and hour compliance goes beyond simply paying overtime. The case reinforces that how employers treat different types of non-work pay can have significant implications under the FLSA, especially when it comes to calculating the regular rate and overtime. Employers should ensure that their payroll practices align with FLSA regulations and that policies on weather pay and other non-work compensation are consistent, documented and justified under the law.

For more information on how to enhance your organization’s compliance efforts, contact MyHRConcierge at 855-538-6947 ext.108, ccooley@myhrconcierge.com. Or, schedule a convenient consultation below: