FMLA / NJFLA and Performance Reviews

Catbert46

I have a couple employees in New Jersey. By law they were allowed to take 12 weeks FMLA and 12 weeks NJFLA for maternity. It is now time for merit increases and performance appraisals. These employees goals were subtantially based on their work during our busiest time of the year. They were both absent during that time. Our merit system will already divide their merit increase by half since they were only here half the year. Can the Supervisor decrease their overall performance grade because they weren't available to meet their goals or is that considered discrimination against them? I can't find specifics in the reg so I thought I would turn to the all knowing HR Hero team!

Thanks for your help.

stilldazed

Good question. We've had similar situations in our organization. While I can't ensure that we or you won't get challenged, we have based wage increases on our policy. In situations where the employee's presence was required to satisfy some sort of goal for the best available merit increase and the worker was not available due to FMLA-protected LOA, we have reduced the merit increased and documented relevant records that the increase was based on the work accomplished. When I argue this point with myself, I can appreciate that one argument would be that the employee was potentially penalized by his/her absence, but from a results/production perspective, the volume of work or degree of goal achievement during their presence at work is what we use as our focus. And in my self-dialog, I continue to support that it our focus is a reasonable basis in a merit increase situation.

Now, if a wage increase were not based on merit, the results could be very different. Longevity-based wage increases should not be adjusted for protected absences.

I am curious to hear from other forumites who are more expert than me on the FMLA subject and curious about what your organization ultimately does.

Best wishes.

System

29 CFR 825.215(c) (part of the DOL's regs re: FMLA) states:

[b]Equivalent Pay.[/b] (1) An employee is entitled to any unconditional pay increases which may have occurred during the FMLA leave period, such as cost of living increases. Pay increases conditioned upon 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, 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...
(2) 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 attendance and safety do not require performance by the employee but rather contemplate the absence of occurrences. To the extent an employee who takes FMLA leave had met all the requirements for either or both of these bonuses before FMLA leave began, the employee is entitled to continue this entitlement upon return from FMLA leave, that is, the employee may not be disqualified for the bonus(es) for the taking of FMLA leave. [i]See[/i] Sec. 825.220 (b) and (c). A monthly production bonus, on the other hand (sic) 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).

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Therefore, you may take the leave into consideration with respect to a production-based bonus. However, I would say it's a muddier issue for a "merit" bonus, unless it's clear that bonuses for merit are given based on some standard of actual performance rather than, say, just a general feeling that an employee is a good worker. Although stilldazed mentions that the employee's presence was necessary to satisfy some goal in order to get the merit increase, you'd have to be careful on this as well - if the "goal" is something like "bring in 30 new customers per year" and the employee brought in 29 and didn't get that 30th one because he was out for 12 weeks, that would be fine (as long as you wouldn't pay the bonus to other people who missed the 30-customer goal due to leave). But if the goal is something like "no more than 15 absences per year," you wouldn't be able to take the FMLA leave into consideration when counting absences for the purposes of that merit bonus.

System

Oh, I also meant to add that it would be a violation of the FMLA to consider the FMLA leave in a performance review. Bonuses for meeting concrete production goals is one thing, but the performance appraisal should be based on the employee's performance for the time they actually worked. The FMLA specifically prohibits employers from discriminating against employees who have used FMLA leave by using FMLA leave as a negative factor in any employment action, such as hiring, promotions or disciplinary actions. The DOL has taken the position that using FMLA leave against an employee in a performance evaluation would be considered discrimination.

Catbert46

Thanks for the feedback. Chicken that I am, I decided to contact a NJ labor attorney to be osn the safe side. Basically he said it was fine to pro-rate the merit increase by the time missed if that had been our practice. But was concerned that in conjunction with reducing the overall performance score was "double dipping". So we changed the weight of the production pieces of the performance review so that it no longer was the heaviest ranking piece of the review.

Thanks again for the feedback!