STRATEGIES FOR ATTACKING ATTENDANCE CONTROL ISSUES

1. STRATEGIES FOR ATTACKING ATTENDANCE CONTROL ISSUES *Participation in this seminar does not establish an attorney-client relationship between Duane Morris LLP(or the Duane Institute) and any participant (or his or her employer.) Further, no statements made in this seminar or in the materials should be construed as legal advice pertaining to specific factual situations. DM2/3890841.1

2. Root Of The Attendance Problem • Increase in “use it or lose it” policies • Low morale • Lenient implementation of policy • Abuse of legally protected absences

3. Correcting The Problem • Appropriate (realistic) attendance policy • Consistent implementation by managers • Take advantage of recent FMLA regulatory changes • The “softer side”: employee friendly benefits/ incentives

4. Revamp your attendance policy(how to make it work for your organization)

5. Revamp Your Attendance Policy • Evaluate employees with poorest attendance • Scope of problem (e.g., department-wide, location-wide, shift specific) • Consider timing (e.g., summer) • Impact on critical time period (e.g., increase in manufacturing)

6. Revamp Your Attendance Policy • Consider the culture of your organization • Morale issues • Employees with lower morale have higher absenteeism, especially for reasons other than illness • Consider whether employees are engaged in their jobs • Creative solutions? Telecommute; flextime

7. Revamp Your Attendance Policy • Examine types of time off permitted under current system • Permitted by policy • Permitted by practice • Ad hoc decision-making

8. Revamp Your Attendance Policy • Consider possible abuse of protected leave of absence: • FMLA • State leave law • ADA reasonable accommodation

9. Attendance policy drafting options

10. Attendance Policy Drafting Options • Traditional sick day policy • Requires employees to justify absences • Requires resources to actively manage system • Risk: Managers aware of employee medical condition • Potential ADA “regarded as” disabled claims

11. Attendance Policy Drafting Options • Traditional sick day policy (con’t) • EEOC v. Dillards, Inc., 2008 CV 1780 (S.D. Ca., Sept. 29, 2008) • Complaint alleges violation of ADA where employer requires employee to provide doctor’s note stating the specific nature of the employee’s medical condition or illness in order to obtain approved absence; • EEOC argues request for information is not job related or consistent with business necessity

12. Attendance Policy Drafting Options • Paid time off policy • Straight-forward implementation • Increased flexibility for employees • Risk: Potential increase of abuse due to lack of verification

13. Attendance Policy Drafting Options • Other considerations: • Different policies based upon employee classification/department • Policy of no sick days • Encompass all aspects of attendance (lateness, early departure, extended lunch)

14. Define consequenceS of taking time off

15. Define Consequences Of Taking Time Off • General statement as part of positive code of conduct • Include statement identifying attendance as key expectation • Address attendance violations in general progressive disciplinary system

16. Define Consequences Of Taking Time Off • Point (occurrence-based) system • Violations result in full or partial points • Create time frames for “active life” of violation • Many variations, including points for failure to give proper notice of an absence • No points for legally protected absences

17. Define Consequences Of Taking Time Off • Traditional fault-based system • Discipline based upon unexcused absences • No violation for excused/scheduled absences • No violation for legally protected absences

18. Define Consequences Of Taking Time Off • Traditional fault-based system (con’t) • Establish call-out procedure • Establish criteria for “excused” absence • Establish criteria for “scheduled” absence

19. Define Consequences Of Taking Time Off • No-Fault based system • Discipline occurs, regardless of excuse, prior notice and/or physician’s approval • No violation for legally protected absences • Reserve discretion for absence resulting in termination?

20. Define Consequences Of Taking Time Off • No-Fault based system (con’t) • EEOC consent decree – Verizon • EEOC maintained that the employer’s no-fault attendance policy violated the ADA because employees were “charged” for absences due to ADA-covered disabilities • EEOC required employer to provide, as a reasonable accommodation, an exception for such absences under the no-fault policy

21. Policy Changes to improve overall attendance

22. Policy Changes • Consequences for managers: • Managers should be accountable for employee attendance (except protected absences) • Potential discipline or reduced annual increases where department has excessive absenteeism • Potentialrisk: Managers may under-report absenteeism

23. Policy Changes • “Use it or lose it” policies • More effective when fewer sick days are offered • May be tempered by a “buy back” provision of all or percentage of unused sick days • Potential state and federal tax issue • State law concerns: “use it or lose it” may not be permitted in some jurisdictions (e.g., California)

24. Policy Changes • Prohibit advancing of sickor paid time off days • But, if permit advancing of days: • Require employees to pay back used but unearned days on termination of employment • Payback from paycheck may be limited by state law; some states require written authorization • Potential FLSA issue • Limit right to advance days to employees with solid performance/attendance record

25. Policy Changes • Require “stacking” of various violations • Independent tracks for violations of attendance, call-out procedure and lateness/early departure invites abuse • Escalate levels of discipline by combining similar or even unrelated offenses

26. Policy Changes • Include timing limits • PTO policy: percentage of days must be taken in 1 week increment • Sick day policy: prohibit use of sick days to extend vacation; holiday (before or after) • Require use of days during designated shut down times

27. Policy Changes • Reduce or eliminate “give back” provisions (e.g., for every ‘x’ months of good attendance, disciplinary warning is removed from file)

28. Policy Changes • Reduce or eliminate ability of employee to take additional, unpaid absences after all paid absences under policy are exhausted (both in policy and in practice)

29. Policy Changes • Reduce number of disciplinary levels

30. Additional components

31. Additional Components • Address payment of sick days/paid time off days upon termination • Same or different standard for termination and resignation • Prohibit use of days during notice period of resignation • State law may limit right to hold back payment on termination

32. Additional Components • Voluntary termination: “no call, no show” • Appropriate number of days • Limit inquiry as to reason for absence

33. Additional Components • Interplay of incentive programs • Various of types • Gift cards; gas cards • Bonus pay • Risk: may need to be included in regular rate of pay for purposes of calculating overtime • Leave early on Fridays; play “hooky” days • Emphasize attendance as factor in promotion

34. Additional Components • Interplay of incentive programs (con’t) • Success depends upon: • Sufficiency of reward • Timing of reward

35. Additional Components • Other documents should support attendance requirements • Job description • Department-specific protocols • Performance evaluations

36. Additional Components • Presenteeism issues • Fear of discipline for missing work and having too much work may increase number of sick employees reporting to work • Lowers productivity • Spread of disease

37. Additional Components • Presenteeism Issues (con’t) • Best practices to consider: • Flu shot program • Wellness programs • Educate employees on proper usage of sick days • Encourage sanitary practices at work • Temporary suspension of discipline during period of high risk (e.g., swine flu)

38. Additional Components • Donating Paid Time Off Programs

39. Additional Components • Emphasis of compliance with call-out procedures, including in connection with FMLA covered absences

40. Implementation issues

41. Implementation Issues • Notify employees of policy changes • Potential state law issue if policy change results in reduction in total paid time off benefits available or takes away prior earned benefits • Advance notice may be required for both legal and employee relations reasons

42. Implementation Issues • Establish mechanism to track attendance • Documentation critical • FLSA disclaimer to address tracking attendance for exempt employees • Require in-person call-out procedures, not automated system

43. Implementation Issues • Strict no-call, no-show policy • Train managers on consistent implementation and elimination of ad hoc decision-making

44. Implementation Issues • Union considerations prior to implementation • Obligation to provide notice and bargain upon request • Broad management rights clause may permit unilateral implementation • Waivers narrowly construed • Benefit to providing notice to union in absence of CBA obligation

45. Laws impacting attendance issues

46. Laws Impacting Attendance Issues • FLSA • Tracking attendance for exempt employees • Risk: potential evidence of non-exempt status • Reducerisk: identify that tracking is for benefit or client billing purposes

47. Laws Impacting Attendance Issues • FLSA (con’t) • Docking pay versus docking sick day banks of exempt employees • Limited exception: Permissible to dock pay of exempt employees in full day increments where employee has exhausted available sick days or takes sick days prior to being earned, so long as pursuant to a bona fide sick leave policy

48. Laws Impacting Attendance Issues • FLSA (con’t) • Policy regarding clocking in and clocking out • Require logging in at beginning of day and logging out at end of day (same for meals/breaks) • Prohibit working “off the clock” (may not perform work prior to clocking in or after clocking out)

49. Laws Impacting Attendance Issues • FMLA • Impact of FMLA on attendance issues: • FMLA covered absences are protected absences (cannot discipline for absences) • Limits on employer’s ability to secure physician’s notes for certain chronic absences • Approved intermittent/chronic conditions create potential for attendance abuse

50. Laws Impacting Attendance Issues Hypothetical: Employee is out of work for 3 days. Upon her return, she receives a warning. At no point does employee state the reason for the leave. Three weeks later, employee is away from work again and is terminated for excessive absenteeism. Now, employee claims that she should not have been terminated because the 3 day period several weeks prior was covered by the FMLA. Are the employee’s absences protected?