Under what circumstances does an employer need to pay an employee a bonus if the employee was out on approved Family and Medical Leave Act (FMLA) leave for part of the year?
Author: XpertHR Editorial Team
Bonuses or other pay conditioned on factors such as the employee's seniority, length of service or hours worked must be paid to employees returning from FMLA leave if they would be paid to employees out on an equivalent leave for reasons that do not qualify for FMLA leave.
When the employer has a bonus or other payment program based upon the achievement of a specified goal, it is not obligated to pay the bonus or other payment to an employee on FMLA leave if the employee does not meet the specified goal - even if the employee fell short of the goal because they were on FMLA leave - so long as employees on an equivalent leave (other unpaid leave) are also treated the same way. Specified goals may include working a certain number of hours, selling a certain number of products or maintaining perfect attendance.
Bonus plan documents should clearly state the specific productivity standard or accomplishment (e.g., hours worked, products sold, safety record or perfect attendance) needed to earn the bonus. An employer should review its bonus plan policies or documents with experienced employment counsel.