FMLA Leave: Can an Employee on Leave get a Bonus and Avoid the Onus?

Does an employee on leave under the Family and Medical Leave Act (FMLA) have the reinstatement right to a bonus that other employees received while the employee was on leave?

The FMLA mandates that an employee be reinstated to the “same or equivalent position” upon his or her completion of the leave and return to work, which makes this a legitimate question.  Like a lot of employment law, the answer is nuanced.

In essence, if an employee was eligible for a bonus before the leave (such as a “stay” bonus or attendance incentive pay), he or she remains eligible upon return.  For example, compliance guidance provided by the Department of Labor (DOL) states that “if an employer offers a perfect attendance bonus and the employee has not missed any time prior to taking FMLA leave, the employee would still be eligible for the bonus upon returning from FMLA leave.”

An important exception is for performance bonuses – an employee who, due to an FMLA leave, has not earned a performance bonus that others have (for example one set by production levels during the leave) is not entitled to such a bonus upon reinstatement.  An example provided by the DOL’s compliance guidance is a sales bonus.  Conceptually, it is the difference between being unfairly penalized for the FMLA leave by being deprived of an earned bonus and being unfairly rewarded for it by receiving an unearned bonus.  But there is an exception to the exception, of course: if the employer’s policies allow such bonuses for employees on other types of leaves, they must apply to an FMLA leave as well.  (And that is a good point for a handbook review checklist).

Takeaway:  This is the general rule, but the devil is in the details.  Employees have litigated the issue and the DOL requires compliance, of course.  It is a good idea to seek legal counsel in matters of close interpretation.

About Neal Buethe

Neal Buethe is Head of Briggs and Morgan’s Employment, Benefits and Labor Section. Neal represents professionals, executives, for-profit employers, and non-profit organizations in employment and related matters. He is general counsel to several non-profit corporations, including religious organizations. For Neal’s full bio, click here.

Posted on February 4, 2013, in Family and Medical Leave Act. Bookmark the permalink. Leave a comment.

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