FMLA AFFECT BONUS?

pattyo · June 2008

Our employees can receive up to 10% of their quarterly earnings each quarter as a bonus. The bonus is based upon attitude, timeliness, teaming and effectiveness. Being here and doing the work is a major part of all this criteria. Generally, if an employee is absent and has no PTO available, their bonus is docked.

Our FMLA policy requires employees to use their PTO before going on unpaid leave.

My question is can we still dock employees on their bonus when out on FMLA unpaid leave?

mbeam · June 2008

We too have a quarterly bonus plan and have paid it out to our team members who have been on FMLA. We looked into it and the advice we received was to pay it as if they were here (no docking or partial payment).

Rockie · July 2008

You cannot consider FMLA when you are administering absenteeism policies, bonus calculations, etc. They must be treated as if the FMLA leave did not exist.

stilldazed · July 2008

Suggest you get clarification from DOL sources and reference 29 CFR Sect. 825.215(c)(2). I have the following excerpt in an FMLA administration guide (Nutshell series):

"Bonuses for perfect attendance and safety do not require performance by the employee but rather contemplate the absences of occurrences. To the extent an employee who takes FMLA leave has met all 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; i.e., the employee may not be disqualified for the bonuses for the taking of FMLA leave. A monthly production bonus, however, does require the employee's performance. If the employee is on FMLA leave during any part of the period for which this bonus is computed, the employee is entitled to the same consideration for the bonus as other employees on paid or unpaid leave as appropriate."

If any part of your bonus requires performance by the worker and the FMLA-protected absences removes the opportunity for the worker to perform, you would have an option to reduce, prorate, or otherwise withhold the bonus because of the absense of production/performance information, as long as all other non-FMLA LOA (paid or unpaid) are treated similarly. Of course, the protected absence cannot be used to penalize the worker if he/she otherwise satisfied bonus criteria prior to LOA and no performance by the worker was required and missing because of the absence.

best wishes.

HRQ · July 2008

If their bonus is a percentage of earnings, and they are on unpaid Leave because they have exhausted all of their PTO, how could you NOT dock their bonuses? There are reduced earnings from which to calculate bonuses... It's not punitive, it's following the bonus calculation plan.

I think I must have missed something here....

HR Jones · July 2008

I think what you missed was that the bonus they are talking about is strictly based on Attendance or Safety. If a company gives bonuses based on an employee having perfect attendance - the FMLA time that they were out cannot be counted as them being "Absent" for purposes of computing a perfect attendance bonus and other similiar bonuses. (I think this may be one of the items that may be changing when they issue new regs later this year.)

You are correct, bonuses based on production, or earnings woud be docked because they haven't produced or earned them.

HRQ · July 2008

Thank you - that makes sense.

Do not count the FML absences against the attendance policy, and use the available earnings when calculating based on the remaining factors.

stilldazed · July 2008

If % of earnings, the basis for the bonus, is based on quantifiable performance (actually making x $$ in sales or producing x # of widgets), then you can reduce the bonus by the amount of 'production' the employee did not accomplish during the FMLA-protected LOA, and that is what your question sounds like to me. It is not a penality, per se, but is a recognition that the employee's total output was reduced by the amount of output not 'put out' during the absence.

The other type of bonus, that has nothing to do with a quantification of output and relies simply on the employee's presence in the workplace, cannot be reduced because the FMLA-protected absence must be treated (in this instance) as if the employee was not absent. In other words, all the employees had to do to get this bonus was to show up for work and not have an accident, have perfect attendance, etc. The FMLA-protected absence cannot be counted as a negative in this type of instance.

Does that make more sense? A little clearer maybe?

pattyo · July 2008

Thank you for helping me sort this out. The bonus is based in part on attendance, attitude, etc. but as for performance, it isn't quantifiable. You have to be here to do the work which is part of the performance. That was mainly my question. Looks like we should play it safe and treat the absence as though the employee were here and base the bonus on their attitude and performance for the time they were present. Thanks again!

FMLA AFFECT BONUS?

Comments