FMLA/Compensation Reviews

lam

During 2001 we have had several employees take time under FMLA, some for maternity reasons and some for illness. It is now the time of the year when we do performance appraisals and give annual increases to pay. Some of the management here think that they should prorate the pay increases for the people who were out on FMLA. Can this be done?

I had the understanding that under FMLA an employee is to be treated as if they were never absent and therefore should be eligible for whatever increase that would be given to them had they not been out on leave.

Is my understanding correct? Or can we prorate increases for those out on FMLA?

sonny

My understanding, and I surely am not the expert, is NO

Rockie

You are absolutely correct. An employee who has used FMLA cannot be "punished" in any manner or perceived as losing anything for having taken FMLA. Quick ticket to EEOC claim.

Gar

[font size="1" color="#FF0000"]LAST EDITED ON 12-18-01 AT 09:26AM (CST)[/font][p]This is why FMLA also means "Forget My Last Absence."

bsa

You are correct. Do NOT prorate increases. Tell your managers to treat the employee as if they were never absent. They must complete the review and increase the same as all other employees in their department. Like the others said, prorating increases would be the fastest way into a court room; and their defense would be thoroughly documented by you.

Jane Reddin AZ

Okay let me weigh in with a slightly different view on this. Those of you who have voiced caution are definitely not going to make a mistake by giving an annual increase as if the employee had worked through their leave - although it might cause some grumbling by the employees who were at work, day-in-and-day out, you won't likely get a lawsuit. Yes indeed, that would be the conservative, cautious approach.

But I'm not sure it is REQUIRED by the FMLA. Let's look at the Regs promulgated by the DOL on this topic.

First - it is true that you cannot DISCRIMINATE against or otherwise PUNISH an employee for taking leave. The reg says: "Employers cannot use the taking of FMLA leave as a negative factor in employment actions, such as hiring, promotions or disciplinary actions; nor can FMLA leave be counted under "no fault" attendence policies." 29 CFR 825.220(c). Note it does NOT say "raises" or "evaluations." Nevertheless, obviously, it would not be wise to say that you are downgrading the person because they took FMLA leave.

On the other hand. . . the regs also recognize and ALLOW you to NOT pay employees who went out on FMLA leave at exactly the same rate as the employees who continued to work, under some circumstances, at least. Example, the regs say: "An employee is entitled to any UNCONDITIONAL pay increases which may have occurred during the FMLA period, such as cost of living increases. Pay increases conditioned on seniority, length of service, or work performed would not have to be granted unless it is the employer's policy or practice to do so with respect to other employees on 'leave without pay.' In such case [if you normally grant increases to employees on leave without pay] any pay increase would be granted based on the employee's seniority, length of service, work performed, etc., excluding the period of unpaid FMLA leave." 29 CFR 825.215 (c).

Additionally, another reg deals with the idea of bonuses: "Many employers pay bonuses in different forms to employees for job-related performance such as for perfect attendance, safety (absence of injuries or accidents on the job) and exceeding production goals. Bonuses for perfect attendence and safety do not require performance by the employee but rather contemplate the absence of occurences. . ." . . .the reg then concludes that employees who otherwise would qualify for these bonuses, cannot be disqualified because they took FMLA leave. HOWEVER, it goes on to note: "A monthly production bonus, on the other hand, does require performance by the employee. If the employee is on FMLA leave during any part of the period for which the bonus is computed, the employee is entitled to the same consideration for the bonus as other employees on paid or unpaid leave (as appropriate)."

Taking all the regs as a whole, I would say that you would be acting in good faith to interpret them to allow you to take into account an employee's absence for an extended period of time AS LONG AS YOU DO THIS NO MATTER WHAT THE REASON FOR THE ABSENCE MIGHT BE. Example: Suzy takes off three months sabattical to tour Europe; Billy Bob takes off three months to go back to school; and Sarah had a baby. All three are downgraded on their eligibility for raise just because they were not around as much as the rest of the folks, didn't "serve their time." I think you would be within the law.

However - everyone else is correct too. You definitely could proceed more cautiously and just give them the dough.

Good luck!
Jane


>During 2001 we have had several employees take time under FMLA, some
>for maternity reasons and some for illness. It is now the time of the
>year when we do performance appraisals and give annual increases to
>pay. Some of the management here think that they should prorate the
>pay increases for the people who were out on FMLA. Can this be done?
>
>I had the understanding that under FMLA an employee is to be treated
>as if they were never absent and therefore should be eligible for
>whatever increase that would be given to them had they not been out on
>leave.
>
>Is my understanding correct? Or can we prorate increases for those out
>on FMLA?

njjel

In my opinion, it is WAY better to be safe than sorry. The cost of defending litiation on this subject isn't worth the risk. Each court will interpret the regulation differently.