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Bonus for Not Using Sick Time Okay?

Posted in: Truckstop Business, Human Resources

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/// Guest post by contributor Federated Insurance

Bonus for Not Using Sick Time Okay?

Today Federated Insurance is sharing one of our “HR Questions of the Month” regarding employment-related practices liability issues. 

Question: We currently have a policy that provides that in the event an employee maintains the maximum accumulation of sick leave of 240 hours and does not use any sick leave during the calendar year, that employee shall receive a $200 bonus payable at the end of the year. Is this a concern for employment practices? We do not intend to discourage sick employees from using their time, rather to reward employees who do not abuse the current sick leave policy and have been healthy enough to accumulate their sick time, which they are allowed to use if they incur an injury but cannot get paid out (for unused hours) upon separation.

ResponseAs discussed below in this response, a policy that creates a bonus incentive for employees who do not use any sick leave (or do not fall below a certain maximum accumulation) can leave the employer exposed to potential employee relations issues, health and safety violations, as well as various discrimination claims that may be difficult to defend. 

As noted, employer policies that create an incentive to avoid using sick leave can certainly leave the employer exposed to potential discrimination claims. Indeed employees who must miss time from work due to disabilities (protected by the Americans with Disabilities Act), or serious health conditions (protected by the federal Family and Medical Leave Act, where applicable) or occupational injuries/illnesses (protected by workers' compensation statutes) or pregnancies (protected by Title VII of the Civil Rights Act and the Pregnancy Discrimination Act), etc., could potentially file claims against the employer alleging that such policy discriminates unlawfully against them, since they would not be eligible for the bonus on account of their absences and use of sick leave. Indeed such employees will necessarily be ineligible for the bonus on account of conditions over which they often have no control, and for which their absences are statutorily protected by law.

Further, even for employees who are not statutorily protected, given that the employer's policy creates incentive for employees to report to work when they are unwell or unfit, such approach can compromise the health and safety of the workplace, something the employer is otherwise required by law to protect. Indeed if sick employees come to work anyway (because they do not want to lose the potential bonus), they risk infecting co-workers and not performing to their highest potential while they are unwell. Employees who are injured and come to work anyway risk exposure to further harm to themselves (and perhaps new or additional workers' compensation claims) and possibly others. Employees who must work in an environment where the health and safety is compromised -- and certainly if they become ill or hurt as a result -- can file claims against the employer or report the employer to OSHA for violations. Such claims may be difficult to defend if the employer had a policy in place that discouraged employees from staying away from the workplace when they were sick or injured, and effectively encouraged them instead to report to work so that they could receive a year-end bonus.

You advise that the provision was intended to reward employees who "do not abuse the current sick leave policy" and who have "been healthy enough to accumulate their sick time," and that the employer does not "intend to discourage sick employees from using their time." That said, even the intention of this policy can make it difficult to defend. Indeed, as noted, while the employer does not wish to discourage employees from using their sick leave when they need it, those who want or perhaps need the additional $200 at year end may do just that. As well, employees who have not been "healthy enough to accumulate" sick time are not necessarily "abusing" the paid sick time policy, though they are arguably being penalized (by not being eligible for the bonus) as though they were. This can lead to significant employee relations issues. Employees who legitimately need to and do utilize their sick leave benefits may resent the employer for assuming or indirectly accusing them of abusing the policy by rendering them ineligible for the bonus that their "healthy" counterparts can enjoy. They may further resent the fact that their health issues (or that of a family member, or perhaps a pregnancy) render them unable to secure the bonus, particularly if they had no control over the health issues that warranted their absences from work (as usually is the case). The employee resentment may be even greater for employees who sustained occupational injuries or illnesses in the course and scope of their employment -- these employees may feel doubly aggrieved by the employer: i.e., working for the employer caused them to become ill or injured and to miss work, which then led to the forfeiture of their bonus eligibility.

Ultimately, a policy that seeks to reward employees for remaining "healthy enough" not to use any of their sick leave can reasonably be viewed as a policy that penalizes employees who have not been "healthy enough" to do so, and a policy to this effect is generally ill advised. Indeed most employees lack any control over their health, or may use sick leave to care for family members, and the policy at issue here is arguably a penalty for those who, through no fault of their own, fell into ill health, or became injured, including those sustained at work, as well as employees who have needed to care for family members and women who have become pregnant. Certainly it is conceivable that some employees might intentionally hurt themselves or take advantage/abuse the sick leave benefits otherwise, but for the most part ill or good health is not something over which most individuals have much control, and we would strongly advise against any policy or practice of offering a benefit to employees who have been able to maintain good health, or not have ill family members, or who did not become pregnant, etc.. As noted, this can result in significant employee relations issues, discrimination claims against the employer that may be difficult to defend, and further can potentially compromise the health and safety of the workplace should employees who are unfit to work due to illness or injury seek to work anyway in order that they may qualify for the bonus.

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{Guest Post} Guest post provided by Federated Insurance*. For more than a century, Federated Insurance Companies has provided peace of mind to business owners through valued insurance protection. Learn more about Federated Insurance>.

The opinions and advice given by guest post contributors are not necessarily those of NATSO Inc. The posts should not be considered legal advice. Qualified professionals should be sought regarding advice and questions specific to your circumstances.

*The "HT Express Update" is provided by Enquiron, a company wholly independent from Federated Insurance. Federated provides its clients access to this information through the Federated Employment Practices Network with the understanding that neither Federated nor its employees provide legal or employment advice. As such, Federated does not warrant the accuracy, adequacy, or completeness of the information herein. This information may be subject to restrictions and regulations in you state. Consultant with your independent advisors regarding your specific facts and circumstances. © 20184 Advisors Law Group, All Rights Reserved

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Federated Insurance

Federated Insurance

The "HT Express Update" is provided by Enquiron, a company wholly independent from Federated Insurance. Federated provides its clients access to this information through the Federated Employment Practices Network with the understanding that neither Federated nor its employees provide legal or employment advice. As such, Federated does not warrant the accuracy, adequacy, or completeness of the information herein. This information may be subject to restrictions and regulations in your state. Consultant with your independent advisors regarding your specific facts and circumstances.