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Apr25

Bonus & FMLA/NJFLA

We are an employer based in New Jersey. Depending on our budget, we provide our staff a bonus on an annual basis. This fiscal year we provided this bonus to our staff last month (March 2015). We had a staff who went out on FMLA/NJFLA end of January 2015 and recently returned from her leave a few days ago (April 2015). So a couple of questions: 1. Is this staff entitled to the bonus, even though she was out on leave during the time the bonus was given? 2. If the answer to the first question is yes, do we have to pay her the full amount (as was given to other staff in her position) or can we prorate it to adjust for the time she was out? 3. Can her seniority date be adjusted to reflect the time she was out (this bonus is not tied into seniority but other incentives like anniversary recognition bonuses are) or must we treat it as though her employment was continuous? Thank you for your assistance.

Both the federal Family and Medical Leave Act (FMLA) and the New Jersey Family Leave Act (NJFLA) provide eligible employees of covered employers unpaid leave periods during which the employee is entitled to job protection and other specified benefits.

Under both laws, employees returning from leave must be restored to the same or an equivalent position with equivalent pay, benefits, and other employment terms. Equivalent pay can include increases, premium pay and, in certain situations, bonuses.

The NJFLA defers to the FMLA regulations for the application of bonuses. Under the FMLA, if an employee was eligible for a bonus before taking FMLA leave, the employee would be eligible for the bonus upon returning to work.

However, the FMLA does not require that employees on FMLA leave be allowed to accrue benefits or seniority. If the bonus 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 bonus may be denied.

For example, an employee on FMLA leave might not have sufficient sales to qualify for a bonus. The employer is not required to make any special accommodation for this employee because of the FMLA.

Employers must treat an employee who has used FMLA leave at least as well as other employees on paid and unpaid leave (as appropriate) are treated. For example, if an employee who used paid vacation leave for a non-FMLA purpose would receive the bonus, then the employee who used paid vacation leave for an FMLA-protected purpose also must receive the bonus.

To answer your questions:

1. Yes, an employee on FMLA or NJFLA is still eligible for a bonus. However, if the bonus is based on the achievement of a goal such as hours worked, productivity or perfect attendance, an employer may deny the bonus if the goal is not met or the employer may prorate the bonus to account for the time on leave.

2. A bonus based on the achievement of a goal can be prorated to account for the employee’s time on leave.

3. Employees on FMLA or NJFLA leave are not entitled to accrue seniority while on leave.

It’s important that the criteria for the bonus is clearly documented and uniformly applied to all employees. If you chose to prorate the bonus, make sure the reasons as well as the calculations are clearly documented.

This entry was posted on Saturday, April 25th, 2015 at 7:32 pm and is filed under
Compensation, Labor Laws.
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