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Design your bonus program with the FMLA in mind

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in Compensation and Benefits,FMLA Guidelines,Human Resources

Pennsylvania employers can look to a recent 3rd Circuit Court decision to keep their bonus plans in compliance with the FMLA. The case is the first of its kind in the country and provides employers with guidance beyond that found in the FMLA's regulations. The decision is now law in Pennsylvania, Delaware, New Jersey and the Virgin Islands.

Facts of the case

An employer offered a full bonus to employees who worked at least 1,950 hours in a given year. Employees who worked fewer than 1,950 hours saw their bonuses prorated.

For example, employees who only worked 90 percent of the required 1,950 hours received 90 percent of the full bonus. The plan included sick and vacation time as "hours worked" for bonus purposes, but excluded time lost to disability leave.

One employee took eight weeks of short-term FMLA disability leave. As a result, the company prorated his bonus. He filed suit claiming the company penalized him for...(register to read more)

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