On January 8, 2019, the U.S. District Court for the Eastern District of Arkansas issued an opinion and order granting summary judgment to an employer, finding the employer did not violate the Family and Medical Leave Act (FMLA) by discontinuing an employee’s shift differential due to absences necessitated by FMLA leave. Flowers v. McCartney, No. 4:17CV00604.

Factual Background

The employer offered nurses who worked weekend shifts a 30 percent pay differential, contingent on signing a “Weekend Option Agreement,” whereby the nurses agreed not to miss more than six weekend shifts. If a nurse missed more than six weekend shifts, he or she no longer qualified for the enhanced pay differential and would not be eligible to participate in the enhanced weekend pay option for one year.

After signing a Weekend Option Agreement, the employee missed more than six weekend shifts due, in part, to taking FMLA leave for her own serious health condition. When she returned to work, the employer discontinued her 30 percent pay differential. However, the employee continued to clock in by affirmatively selecting the 30 percent pay differential. When the employer discovered that the employee was still selecting the pay differential, it terminated her employment for intentional falsification of records. The employee sued, alleging, among other claims, that the employer violated the FMLA.

The Court’s Analysis

In holding that the employer could lawfully discontinue the shift differential, the court relied on 29 C.F.R. § 825.215(c)(2), which states that “if a bonus or other payment is based on the achievement of a specified goal such as hours worked, products sold or perfect attendance, and the employee has not met the goal due to FMLA leave, then the payment may be denied, unless otherwise paid to employees on an equivalent leave status for a reason that does not qualify as FMLA leave.” The court noted that the Ninth and Tenth Circuit Courts of Appeals, as well as district courts in Ohio, Texas, and Michigan, have relied on 29 C.F.R. § 825.215(c)(2) to find that “absences caused by FMLA leave may count as absences with respect to bonuses,” provided non-FMLA leave is treated the same way.

In so holding, the court recognized that 29 C.F.R. § 825.215(c)(1) states that “[a]n employee is entitled to be restored to a position with the same or equivalent pay premiums, such as a shift differential.” The court noted, however, that this regulation applies when the shift differential is not premised upon hours worked or an attendance record. Here, the shift differential was expressly contingent upon the employee’s attendance record. The court held that 29 C.F.R. § 825.215(c)(1) did not preclude the employer’s actions here because the differential was contingent upon attendance records and the employer treated all nurses the same, regardless of whether the leave was for FMLA or non-FMLA purposes.

Key Takeaways

This decision reaffirms decisions reached by other courts by finding that an employer may discontinue a pay differential for FMLA absences, provided the employer acts similarly in response to non-FMLA absences. As with many facets of employment law, consistency is key. Before discontinuing a pay differential for FMLA absences, employers will want to ensure that employees on FMLA leave are treated the same as employees absent for non-FMLA reasons.