United States: The Fault Line Running Under "No Fault" Attendance Policies

Seyfarth Synopsis: Many employers have "no fault" attendance policies in place to manage employee absenteeism. Are these policies putting California employers on shaky ground? Read on....

"No fault" attendance policies are one popular method among employers to, with consistency, counsel, discipline and, in some instances, terminate employees who rack up excessive absences. Under these policies, the reason for the employee's absence is usually irrelevant–there's "no fault" for the absence. These policies typically involve assigning employees a certain number of days that they can miss or be late, known as "occurrences" or "occasions," without facing discipline. But when the number of absent days or instances of tardiness reaches a set level, the employee is often put on a disciplinary track, which can begin with a write-up or counseling, and end in termination.

While in theory "no fault" policies are relatively easy to implement and administer, in practice they can land employers on shaky ground. Employers well-versed in federal law are likely aware that best practices advise that they not count certain legally-protected absences covered by the Americans with Disabilities Act and/or the Family and Medical Leave Act in their "no fault" attendance policy calculations. Riding the aftershocks of shifts in federal law, California's Healthy Workplace Healthy Family Act complicates things even more, as we have blogged before.

Finding Cracks in "No Fault" Attendance. AB 1522, California's Healthy Workplace Healthy Family Act, set forth new laws on the accrual and usage of paid sick leave, which we have reviewed in more detail here. It is important to keep in mind that the new law broadens the scope of reasons for using sick leave. And while the basis for leave may not bear on an employee's attendance under a "no fault" policy, to the extent an employee's leave is covered by AB 1522, its provision regarding retaliatory conduct by employers for absences covered by the act, and penalties for doing so, may matter. AB 1522 advises against employers denying an employee the right to use paid sick leave, discharging or threatening to discharge an employee who uses paid sick leave, or demoting, suspending or discriminating against an employee. Damages for AB 1522 violations may range from mandatory reinstatement to hefty civil and/or administrative penalties.

Here is where things get shaky. The no-retaliation restriction of AB 1522 makes it challenging to impose "no fault" attendance policies or evaluate performance based on leave an employee takes under the new law. Setting aside instances of fraud or failure to report absences, employer-imposed discipline for taking leave under the new law can cause a 9.0 on the Richter scale. But fear not–"no fault" policies need not be levelled entirely.

What about Perfect Attendance Rewards? On the flip side of "no fault" attendance policies, many employers reward employees with perfect attendance with cash bonuses, gift cards, or extra planned time off. While such rewards reinforce and incentivize good employee behavior, including punctuality and reliability, the threat of violating the ADA, FMLA and/or AB 1522 still looms. For example, FMLA regulations indicate that employers may not count FMLA as a "negative factor in employment actions, such as hiring, promotions or disciplinary actions". See, 29 C.F.R. § 825.220(c). Considering AB 1522 contains similar language regarding retaliation (see supra) for covered leave, employers who make exceptions to their policies may want to include AB 1522 absences as one in many perfect attendance reward considerations.

Reducing Hazards with a "Two-Bucket" Approach. If employers do not distinguish between AB 1522 leave and policy-based leave, they run the risk of facing penalties for discipline (or rewards) based on employee attendance where that employee may have used paid-time-off. To continue applying their "no fault" attendance policies, employers can adopt a "two-bucket" approach to tracking the accrual and use of sick leave and vacation that would allow them to separately monitor each employee's accrual and usage of AB 1522-mandated leave versus non-protected time off. Employers could thereby isolate leave for which discipline can be issued and subject it to their attendance and/or performance standards. Employers must also be aware that given California's multitude of protected reasons for taking time off, even with the "two-bucket" system, some vacation time may still be protected time.

Alternatives to the "Two-Bucket" Approach–is there a way to retrofit existing policies? A little flexibility in "no fault" attendance policies can go a long way. Employers may choose to carve out leave protected under federal, state, and local laws from their tally of employee absences. One way to incorporate such flexibility is to expressly state in the attendance policy that the employer will excuse absences protected by federal, state, and local laws, and will consider them on an individual basis.

Another method of avoiding aftershocks would be to change attendance policy numbers to account for leave for legally authorized purposes. In other words, employers may limit penalties to employees whose absences go above and beyond the amount time that is, or may be, authorized under AB 1522 (or other federal, state and local laws). Ultimately, the goal is to ensure that employers do not penalize or discriminate against employees taking lawful leave.

A few tips on preparedness and prevention:

As you can gather from the information above, this area of employment law is complex, technical and, like the ground in California, ever-shifting. No employer should rely solely on dated or generalized information in forming, revising, or implementing "no fault" attendance policies. It is best to proceed with caution, and the assistance of expert employment counsel. That being said, here are some key takeaways:

  • Communicate attendance policies clearly to all employees. Include the policies in handbooks and on posters in common areas.
  • Avoid taking adverse employment actions against an employee who requests or takes legally-authorized leave.
  • For actions against employees pursuant to a "no fault" attendance policy, or reward based on perfect attendance, document business reasons for the action on file.
  • Keep an eye on employment laws, and review and revise your attendance policies to comply with the law regularly–there's no telling when a new shift will change the landscape again.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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