are perfect attendance policies compliant with the fmla and ada_ - lexology

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Are perfect attendance policies compliant with the FMLA and ADA?

Quirky Question # 190:

My company is a firm believer in rewarding good behavior as opposed to punishing badbehavior. Along those lines, we give bonuses to employees who maintain perfectattendance over the course of a year. For employees who do have absences, we apply a

no-fault system that grants employees a set number of days that can be missed eachyear for whatever reason, so that our supervisors and HR staff do not waste timechecking in on the reasons for every absence.

Of course, our employees periodically take different types of leave from work, including leave underthe Family and Medical Leave Act and the Americans With Disabilities Act. An employee whorecently took FMLA leave advised us that she does not think she should be disqualified from theperfect attendance bonus because she did have perfect attendance when she wasnt forced to beout because of her health issue. Another employee who took some leave for a disability issue claimsher missed days should not apply to her annual 15-day threshold, again because the leave was notby choice.

Neither employees request seems valid to me. How can an employee who misses work have perfectattendance? And whats the point of a no-fault attendance policy if certain missed days count, whileother do not?

Joels Analysis:

Attendance policies tend to be the toughest to administer on a day-to-day basis. Perfect attendancebonuses and no-fault attendance policies are no exception. Based on some relatively recentguidance contained in Family and Medical Leave Act (FMLA) regulations, and considering a recent

Dorsey & Whitney LLPJoel O'Malley

USAMarch 7 2012

erfect attendance policies compliant with the FMLA and ADA? - Le... http://www.lexology.com/library/detail.aspx?g=929979b2-329b-4

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case pursued by the Equal Employment Opportunity Commission (EEOC), however, there doappear to be some clear answers to your questions.

Attendance bonuses and policies can be powerful tools. Employers frequently put in place policiesto incentivize positive employee behavior, including providing benefits for employees to attend workpunctually and regularly. And like you, employers also have sought to simplify attendance policies toavoid paternalistically requiring an explanation for every missed workday. These no-faultattendance policies generally allow a certain number of unexcused absences without requiring the

employee to provide any documentation, and then penalize employees who take leave beyondallowable limits.

Both perfect attendance and no-fault policies make encouraging employee dedication and managingabsenteeism easy. For perfect attendance bonuses, a simple check of the years attendanceprovides a quick computation of commitment and a clear measure for presenting a reward. Forno-fault attendance policies, employees need not fret about getting a doctors note, and employerssave on the time and energy devoted to these administrative burdens.

Though perfect attendance bonuses and no-fault attendance policies are easy and beneficial toemployers and employees alike, both policies implicate employee leave laws, with contrary results.

For perfect attendance bonuses, employers should feel comfortable, based on recent FMLAregulation changes, that FMLA and ADA leave may be counted against an employees perfectattendance, as long as employees on other leaves are similarly disqualified. But for no-faultattendance policies, while it seems counterintuitive to ignore an employees absences whendetermining whether an employee has reached her threshold of allowable absences, employersshould do exactly that when the absences are the result of FMLA or ADA leave.

To understand this difference, its useful to be reminded of the FMLA and ADA statutory andregulatory frameworks. The FMLA prohibits an employer from interfering with the exercise of anFMLA right, including the entitlement to absences from work. The ADA prohibits employmentdiscrimination or retaliation against a qualified individual on the basis of disability. Discriminationincludes the failure to provide to a qualified individual with a known disability a reasonableaccommodation, including absences from work, unless the accommodation causes the employer anundue hardship. Retaliation includes taking an adverse employment action against an employeebecause of a disability. Relevant here, the ADA may require an employer to suspend or modify itsattendance policies to accommodate a disabled worker.

Turning first, then, to your companys perfect attendance bonus, FMLA regulations state that anemployer may not use the taking of FMLA leave as a negative factor in employment actions. See,29 C.F.R. 825.220(c). For perfect attendance bonuses, recent regulations allow an employer toexclude an employee taking FMLA leave from a perfect attendance bonus as long as employees

having taken other leaves (e.g., vacations) are similarly disqualified. See id. 825.215(c). One mightask how the FMLA rule prohibiting the FMLA from being used as a negative factor againstemployees squares with the more recent regulation permitting FMLA leave to disqualify perfectattendance bonuses. The justification appears to be that policies that penalize employees for takingFMLA leave itself are impermissible, but perfect attendance bonus disqualification for FMLA leavesimply denies an extra reward that has been conditioned on the employee achieving a job-relatedperformance goal.

As for your companys no-fault attendance policy, the same FMLA regulation described abovespecifically prohibits an employer from counting FMLA leave against an employee. See id. 825.220(c). (nor can FMLA leave be counted under no fault attendance policies). The Americans


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with Disabilities Act (ADA), as interpreted by the EEOC, similarly finds fault in no-fault attendancepolicies. Last year, the EEOC reached a $20 million settlement with Verizon in a nationwide classaction where the EEOC alleged Verizons no-fault attendance policy violated the ADA. The policyprovided for progressive discipline upon accumulation of chargeable absences, but neither includedan exception for qualified individuals with disabilities whose absences were caused by disabilities,nor a provision for reasonable accommodation of qualified individuals with disabilities. In light of theFMLAs regulations against no-fault attendance policies and the EEOCs ADA interpretation, itappears employers should be very careful in applying such policies. For some employers, theburdens of accounting for FMLA or ADA leave might outweigh the administrative benefits of such ano-fault policy in the first place. Careful application of a no-fault attendance policy is all the moreadvisable given the recent amendments to the ADA, which generally permit many more conditions tobe considered disabling, and, therefore, require employers to treat many more absences as causedby a disability (and protected against retaliation). For these reasons, some employers may considerreturning to a more paternalistic fault-based attendance policy, with absences treated as eitherexcused or unexcused, and with penalties imposed for excessive unexcused absences.

Another option employers have used to avoid a paternalistic fault system but gain some benefits of ano-fault system is to assign points to unexcused absences (but not excused leaves), then expunge

points after a designated period (typically 12 months). Points typically drop off after the designatedperiod even if the employee was on leave for a long period and actually worked very little during theprior 12 months. The question arises, then, whether FMLA or ADA leave may be considered whendetermining the expungement period in such a point system. Thankfully, in applying these types ofattendance points policies, employers may rely on periods actually worked, and need not countperiods of FMLA or ADA leave. A relatively recent case from the Seventh Circuit Court of Appealsconfirms this. In Bailey v. Pregis Innovative Packaging, 600 F.3d 748 (7th Cir. 2010), the court heldsuch a system was permissible because employees on leave do not necessarily accrue additionalbenefits while on the leave. Thus, employees on leave would not accrue a benefit (expungement ofaccumulated points) which would flow from being at work without taking unexcused absences.

One of the reasons employers prefer no-fault attendance policies is that absences need not beverified as excused versus unexcused. Unfortunately, if a paternalistic policy replaces a no-faultpolicy, the verification process itself includes legal risk. In particular, employers should avoidrequiring a doctors note to verify every absence occurring during intermittent FMLA leave, andinstead rely only on the FMLA-directed certification and recertification process. In the recent case ofJackson v. Jernberg Industries, Inc., 677 F. Supp. 2d 1042 (N.D. Ill. 2010), the employer requiredemployees to produce a doctors note for each absence occurring during intermittent FMLA leave.The policy was designed to prevent employee abuse. The plaintiff employee was terminated forfailing to and refusing to comply with policy; after the employee was twice tardy for reasonsunrelated to the FMLA condition, the employee refused to supply a doctors note to support 13unscheduled absences purportedly due to the FMLA condition, and the employee missed 10

consecutive days for reasons unrelated to the FMLA condition. The court held the employersverification policy interfered with employees exercise of FMLA rights because a doctor had alreadyprovided certification supporting the employees intermittent FMLA leave. The court instructed thatthe FMLA recertification process was enough to protect employers against abuse, and that atrecertification, the employer may ask the doctor to analyze the employees pattern of absences todetermine whether the medical condition supports that pattern. Thus, employers cannot gooverboard with verifying the reasons for absences under fault-based absence policies.

Of course, attendance policies are not the only ones potentially affected by the FMLA or ADA. Aclose cousin is a punctuality policy, which rewards employees for showing up to work on time. Just


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like no-fault attendance policies, no fault tardiness policies also should be avoided, at least fornon-manufacturing jobs where punctuality is not necessary to keep assembly lines running. One ofthe rare cases analyzing such a policy clearly suggests this result. In Holly v. Clairson Industries,492 F.3d 1247 (11th Cir. 2007), the employer instituted a no-fault tardiness policy and definedpunctuality as an essential function of every employees job. A paraplegic employee was terminatedfor excessive tardiness and sued. The court sided with the employee, holding that strict punctualitywas not an essential function for all positions, which the companys uniform policy failed torecognize. In that case, the employee did not work on an assembly line, and performance wasdeemed sufficient as long as the work got done. In light of the Holly case, employers should makesure to tie any punctuality policy to the specific essential requirements of the jobs affected.

So, where does that leave your company in trying to design legally compliant and administrativelyefficient attendance policies? It appears under the current FMLA and ADA legal framework thatperfect attendance bonuses are permissible, as long as all types of leaves disqualify an employeefrom the perfect attendance award. The key is consistency.

No-fault attendance policies should be carefully applied, and some employers might considerreplacing them with some sort of fault-based system. Under such a fault-based system, at least forintermittent FMLA leave, an employer should not demand proof to excuse every absence. To guardagainst the behavior of the employee in the Jackson case (missing 10 straight workdays for reasonunrelated to the FMLA condition), employers should consider a no-call/no-show policy permittingtermination of employment, and should act on that policy when appropriate. But if the fault-basedattendance policy involves the expungement of unexcused absence points after a period of time, theemployer may exclude FMLA and ADA leave time from that period.

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are perfect attendance policies compliant with the fmla and ada_ - lexology

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