FMLA-2 — "No fault" attendance policies/Accrual of paid leave/Calculation of overtime pay/Attendance incentive plans

U.S. Department of Labor
Employment Standards Administration
Wage and Hour Division
Washington, D.C. 20210

August 16, 1993 FMLA-2

Dear
Name*,

This is in response to your letter in which you pose a number of questions regarding the provisions of the
Family and Medical Leave Act of 1993 (FMLA) and the implementing regulations at 29 CFR Part 825.

Leave taken for a FMLA required reason (i.e., birth or placement of a child for adoption or foster care, to
care for a family member with a serious health condition or for the employee's own serious health
condition) may not be counted in any manner under "no fault" attendance policies. See § 825.220(c).

The issue regarding the manner in which paid vacation is accrued is not clear. If the issue is accrual of
vacation time (pay) the employee is not entitled to accrue benefits or seniority during periods of unpaid
FMLA leave. Consequently, there would be no accrual of vacation pay during a period of unpaid FMLA
leave. See §825.215(d)(2).

The Fair Labor Standards Act requires an employer to include nondiscretionary bonuses in the calculation
of an employee's regular rate before computing statutory overtime pay due. One method of calculating
the overtime pay due as the result of paying a bonus, would be to express the bonus as a percentage of
the total earnings of the employee(s) including regular and overtime earnings. Such a calculation would
not be contrary to the provisions of the FMLA.

With regard to attendance incentive plans rewarding perfect attendance, an employee may not be
disqualified nor may any award be reduced for having taken unpaid FMLA leave. In a case where the
bonus is expressed as an amount per hour worked, the employee on unpaid FMLA leave would receive a
lesser amount than an employee who had not been on FMLA leave, as the employee on FMLA Leave is
not entitled to accrue benefits during FMLA leave. See § 825.220 (c).

Sincerely,

J. DEAN SPEER
Director, Division of Policy and Analysis

* Note: The actual name(s) was removed to preserve privacy in accordance with 5 U.S.C. 552 (b)(7).
Working to Improve the Lives of America's Workers Page 1 of 1