I work at a firm in NJ where the majority of our compensation is paid through an annual bonus. This bonus does not vary dramatically year to year, and historically has increased by small increments each year. I just returned from a 17 week maternity leave, 10 weeks of which was paid leave. While on maternity leave, I did work occassionally from home and was available for any questions that could not be covered by another member of my team. I recently received my annual bonus and was told that the decrease in my compensation was due to the fact that they pro-rated my bonus due to the fact that I was on leave. It was emphasized that it had nothing to do with my performance. I thought according to the FMLA, a leave cannot be counted against an employee. Did my company violate any labor laws by pro-rating my bonus and essentially not paying me the compensation they would have had I not been on maternity leave?

I actually talked to the US DOL about a very similar situation not long ago.

What they told me is that if EVERYONE who took any kind of leave also got the bonus pro-rated, then it's okay. They can't single out people who were on FMLA, or on maternity leave, but at the same time you don't get to keep the whole bonus when people who were out on other kinds of leave had it pro-rated.

But if other people who were on leave got the full bonus, you have to get the full bonus.

I work in an investment bank in NY where annual bonus is a big chunk of compensation. Whereas salary normally goes up slightly each year, bonus can increase dramatically year on year until your bonus can be even more than your salary. How much bonus you get depends on 3 factors (the firm's overall performance, the person's group's performance, and the individual's performance). Each year's bonus is basically an adjustment to what you got the previous year based on the 3 factors mentioned above.

In 2005, I went on maternity leave. I was told that my bonus for the year was prorated at 1/2 because I only worked 1/2 year. I was ok with that. So for example, in 2004, lets say I made a $5,000 bonus. They said my bonus would have been $10,000 in 2005 because I had done well, but because I only worked 1/2 the year, they were giving me $5,000.

in 2006, however, they used $5,000 as a base number from which they derived my new bonus & said that this year I performed very well & would be getting $10,000. I think they were required to use my 2005 per annum bonus ($10,000) as the base number from which to derive my bonus which would then be something greater than $10,000. I think they used my maternity leave pro-rated bonus as a cheap way of paying less of a bonus.

Are they legally allowed to do this?

This is less a matter of law than of the bonus agreement.