Sick Leave Buy Back FLSA implications

selliott

We are considering the implementation of a sick leave buy back program. However, I have read that this income must be included when calculating an employee's regular rate of pay? What are the implications of a sick leave buy back program with respect to the FLSA?

Thanks!

Holly Jones

For the most part, yes, sick leave buy-backs must be calculated as regular wages. (There's actually a circuit split among the federal courts -- the Sixth Circuit, [url=http://www.hrlaws.com/node/1206141]no stranger to disagreeing with the DOL,[/url] has held that sick leave buy backs do [i]not[/i] count as regular wages. To the contrary, the Eighth and Tenth Circuits, and the DOL, hold that sick leave buy-back pay should be counted as regular wages).

The DOL suggests that sick leave buy-back pay is similar to an "attendance bonus" and that these programs function as an [url=http://www.hrlaws.com/node/1126]incentive for employees to achieve certain goals (presence at work) or to work more productively (by being present more regularly/often.)[/url] So instituting a buy-back program would have the [url=http://www.hrlaws.com/node/1205005]same implications as a nondiscretionary bonus.[/url]

sonny

Clarification please. . .we have a sick leave buy back program and it is taxed etc as regular wages. .is this to what you refer? Or am I missing that there is more that must be counted as wage for purpose of ie OT/pension etc.?