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FMLA Bonus Pay Non-Exempt Alabama

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  • FMLA Bonus Pay Non-Exempt Alabama

    I am wondering if I can exclude non-exempt employees from an annual performance based bonus program if they were out for a portion of the year on FML? I'm considering using 3 months as the limit of time out.

    Thank you

  • #2
    From the SHRM website

    "The rules for bonuses are the same as those for pay increases: an employee’s eligibility depends on how the bonus is structured and what the employee must do to receive it. Per the regulations, “if a bonus or other payment is based on the achievement of a specified goal such as hours worked, products sold or perfect attendance, and the employee has not met the goal due to FMLA leave, then the payment may be denied, unless otherwise paid to employees on an equivalent leave status for a reason that does not qualify as FMLA leave. For example, if an employee who used paid vacation leave for a non-FMLA purpose would receive the payment, then the employee who used paid vacation leave for an FMLA-protected purpose also must receive the payment.” (Reg. 825.215)
    For example, if an employee bonus is based purely on production, and the employee is not there to produce, he or she may be excluded from eligibility, assuming those on similar non-FMLA leaves are also excluded.

    As a result, employers must be clear regarding eligibility requirements for various types of bonuses to be certain they do not improperly disadvantage employees returning from family or medical leave."


    • #3
      If someone who was absent on non-FMLA leave would not get the bonus, then you do not have to be given the bonus. If someone on a non-FMLA leave would still get it, then you have to be given it.

      performance bonuses & FMLA
      Sec. 825.220 (b) and (c)
      example -A monthly production bonus 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).

      ref. HR newsletter 8-2013
      Last edited by Betty3; 01-03-2014, 08:07 AM.
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      • #4
        I can't imagine when an employee would be out for 3 months unless they're covered by FML. If there were on vacation or other apporved leaves, they wouldn't extend that long. Does the 3 month block of time come into play?


        • #5
          In my industry it is quite common for there to be non-FMLA leave that can last for up to two years.

          There is no getting around it; you cannot single out employees who use FMLA. Either all employees who miss x amount of time are excluded regardless of what kind of leave it is, or none are. Singling out employees who use FMLA is a very, very big no-no and expressly prohibited by statute.
          The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.


          • #6
            OK. What I hear is that I can exclude from payment, all employees who are out for any approved leaves, assuming I use the 3 month time block as the criteria. If I'm paying bonuses to both exempt and non-exempt, can I do so using different sets of earnings criteria, and not apply the "leave" factor to the exempt group, i.e. not penalize them for 3 months or more out because I wouldn't include something like attendance as a metric?


            • #7
              Let me see if I understand you correctly. There is a bonus based solely on production. If production goal X is met, everyone in the group gets the bonus. I think, you are looking to exclude those who contributed less to that production goal being met because of the amount of time they missed from work. What you are really doing is adding another criteria to your bonus eligibility; attendance. That is legal but I would suggest it might cause some morale issues. You also need to consider whether those who were hired during the year are eligible and at what point. If it is calendar based, and you are looking at production for the whole calendar year, someone hired in February contributed less than someone hired the year previous but more than someone hired in September.

              I would also suggest that you make the criteria "having worked at least X hours in the previous year", rather than focusing on how much time was missed. For one, not everyone takes FMLA in one big chunk, and someone who just uses a lot of leave sprinkled throughout the year very well may be missing just as much time as someone who took time off for a surgery. By focusing on the number of hours (or days) worked, it puts the focus on your real concern which is making it fair based on time contributed to meeting that goal. As long as you don't single out those on FMLA, you are fine. Remember not everyone takes the full 12 weeks.
              I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.


              • #8
                Thanks much. Will consider all!


                • #9
                  Agreed with other answers. One last suggestion. Make any/all changes on a GO FORWARD basis only. If the work has already been done, then Common Law in theory prevents you changing the conditions of employment retroactively.
                  "Reality is that which, when you stop believing in it, doesn't go away".
                  Philip K. **** (1928-1982)


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