Bonus given during Leave of Absence

[Serena Traa]

#91510

Hello,
I am from a non-unionized workplace in Manitoba. We currently have a bonus structure that is paid out once per year. Employees are required to meet certain criterion for the year to receive the full bonus. I am finalizing the details of what should happen if an employee is on a protected leave of absence. The only situation we have encountered is an employee on Maternity Leave. We did not award any bonus for the time they were on leave, only starting the day they returned. However, there are several protected leaves that are much shorter in duration (compassionate care leave, domestic violence leave, parental leave, medical leave, jury duty etc.). We are trying to determine, internally, what period of time an employee must be on leave for them to receive a lesser bonus (decrease by the amount of time they were away).
Is there any legal aspects of this that I should be taking in to consideration? I recognize that they are still considered an employee during their leave, but they are not contributing to the team during that team and thus do not meet the bonus criteria.
If there are legal aspects I am missing or should take in to consideration, please let me know. Thanks

[Rick Tobin]

#91525

This is a very interesting question.

If the bonuses are performance based, you are not required to award any employee on extended leave like maternity, because they were not working and therefore did not hit their individual targets. If, however, the bonus is structured as a profit share towards overall company performance and not tied to any individual performance based metrics, this may be considered a part of overall compensation – especially if it has been awarded annually for some time. In this case, you may have to pay it out, but it can be held until the employee returns to work, or prorated for the portion of the year they were working.

Now would be a good time for you to look at your bonus structure and program. It is always recommended that bonuses be tied to individual performance metrics and contributions, as well as company metrics and profit. It’s easier to have a bonus plan where everyone gets a flat amount if company targets are hit, but it doesn’t incentivize or reward high performers, in fact, research shows that all it does is lower the mean to the lowest acceptable level or productivity.

HR Insider Staff

[Author]

Posts