Sick/Personal Leave Policy - Is this legal?

MDHRGirl

Please take a look at this policy that is currently in our handbook.  Is this a sound, legal policy? In my professional opinion, this is not.  Your input would be greatly appreciated. Thanks!

Hourly Associates-

ABC Company will pay up to six days of sick or personal leave per year, accumulated on the basis of a half day per month of employment after six months of continous employment.  You may carry over up to ten days of sick/personal leave.  Accumulated sick/personal days in excess of ten will be paid on the last pay of the year.

For associates hired prior to Septemeber 10, 1996, pay for sick/personal days is computed based on your current rate time eight hours per day.  A medical certificate may be required.

For associates hired after September 10, 1996, compensation for sick/personal days is computed at a maximum of $50.00 per day.  All other policies and procedures under this plan remain the same.

Sick/personal pay is a benefit of continued associateship.  Likewise, this benefit does not accrue during periods of extended leave of absences, such as Maternity or Family Leave.

TXHRGuy

So, the maximum accrued sick leave at the end of a year is 16.  That means that you are committed to paying up to 6 days of sick leave in the last pay period of December every year.  Does your CFO have that budgeted?  Have you forecast what that might look like in terms of cost?

MDHRGirl

TXHRGuy,

I didn't write this policy, it was already in the handbook when I started with the company.  In reference to your comment, I suppose they do have it budgeted as this policy has been an effect for a while.  I guess I am more concernced about the part of the policy that talks about associates hired before and after September 10, 1996. Could that part get us in trouble?

dhall111

I don't see how.  It's common to grandfather in a group of employees under a prior policy.  Now, if you picked and chose what employees went into which group and didn't have an valid reason for doing so such a certain class, then it would be wrong.

TXHRGuy

[quote user="MDHRGirl"]

TXHRGuy,

I didn't write this policy, it was already in the handbook when I started with the company.  In reference to your comment, I suppose they do have it budgeted as this policy has been an effect for a while.  I guess I am more concernced about the part of the policy that talks about associates hired before and after September 10, 1996. Could that part get us in trouble?

[/quote]

It's a common practice, particularly in unionized environments or industries with strong seniority-based cultures, where past earlier benefits packages are too costly to continue for future generations of workers.

MDHRGirl

For the associates hired after September 10, 1996, they are only receiving $50 a day which is less than minimum wage for an 8 hour day.  Since it's sick leave and the associate didn't actually work, does the minimum wage requirement apply to this?

TXHRGuy

[quote user="MDHRGirl"]

For the associates hired after September 10, 1996, they are only receiving $50 a day which is less than minimum wage for an 8 hour day.  Since it's sick leave and the associate didn't actually work, does the minimum wage requirement apply to this?

[/quote]

It doesn't count as worked time.  You could, if you wanted, accrue vacation time at $50/day as well.  That's not a replacement for worked time, either.  You wouldn't have a 1:1 relationship between an hour of vacation and an hour of lost work to be substituted by vacation, so you might have to do something there but on a whole day basis for time that is not "time worked" within the meaning of FLSA, there's no problem UNLESS you have a state law to the contrary.