By definition, FMLA leave is unpaid. For commission-based employees, however, sales may continue to come in even while the salesperson is out. In one court case, Estes v. Meridian One Corp, the Fourth Circuit Court of Appeals likened commission to monthly production bonuses, which workers are often entitled to while on leave under the Family and Medical Leave Act (FMLA).
Estes v. Meridian One Corp
In this case, the plaintiff (Estes) claimed she had earned $1,297 in commissions even while on FMLA leave due to breast cancer. She argued she was entitled to this commission because she had set up the sales that inspired it prior to taking leave. The defendant (Meridian One Corp.) declined this argument, stating that their employee had no right to commission while on unpaid leave. While FMLA regulations don’t address commission directly, § 825.215(c)(2) states the following about monthly bonuses:
“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.”
Essentially, employees who are out on FMLA leave must receive the same bonuses as employees who are out on vacation or temporary sick leave. As long as an employee fulfills the requirements for the bonus, they should also receive it. Because the employee, in this case, made the sales necessary for the ‘bonus’ before leaving, and some of her colleagues received the bonus while on leave, the court awarded her commission.
Setting a Legal Precedent
This important legal precedent adds texture to the cut-and-dry FMLA. Now, if you set up several sales before going on parental leave, you should be entitled to the commission from those sales. If your employer chooses to revoke your commission, they must also do so for each employee who is out on leave – whether that leave is paid or unpaid.
Your employer may only deny you commission if they can show that you did not meet the goals required to earn the ‘bonus,’ and they did not pay the commission to other employees on similar leaves of absence.
Bonuses and commission are a special, thinly explained subsection of the FMLA. Although FMLA is unpaid, employees are still entitled to equivalent pay. This means employers must apply their payment principles consistently to all employees who receive a commission.
Employers that fail to honor FMLA leave appropriately could be liable for damages.
If you believe you have been discriminated against or retaliated against for taking your federally guaranteed leave, Donati Law, PLLC is here to help.
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