For the past five years, our company has paid a "discretionary" bonus
at Christmas time.  One of the factors we use to adjust the bonus
(downward) is whether a person has sustained a lost-time workers comp
injury.  Is that legal?

Dear houstonlarry-ga;

Thank you for allowing me an opportunity to answer your interesting
question. As you will note our disclaimer indicates that we cannot and
do not, as a matter of policy, offer legal advice in this forum. What
I am sharing with you is a result of my research on published matters
concerning the law as it might be interpreted relevant to your
situation. As always we recommend one consult a licensed attorney for
absolutes in matters concerning the law. With that behind us, here is
what my research has revealed:

The US Code of Federal Regulations Pertaining to U.S. Department of
Labor directly addresses the issue discretionary bonuses and seems to
be very forthright and unambiguous about what does and does not
qualify under certain circumstances. The statute, ?29 CFR 778.211 -
Discretionary bonuses?, defines discretionary bonuses as ?sums paid in
recognition of services performed during a given period?. The statue
goes on to say:

?The sum, if any, to be paid as a bonus is determined by the employer
without prior promise or agreement. The employee has no contract
right, express or implied, to any amount.?

29 CFR 778.211 - Discretionary bonuses.
http://www.dol.gov/dol/allcfr/Title_29/Part_778/29CFR778.211.htm

Likewise, the statute says that attendance bonuses, individual or
group production bonuses, bonuses for quality and accuracy of work,
bonuses contingent upon the employee's continuing in employment until
the time the payment, etc., are similarly governed with discretion as
long as they are not pursuant to any prior contract, agreement, or
promise. Otherwise they are excluded from this statute.

It appears then that the employer may, at his or her discretion,
choose to pay, decline to pay or modify payments according to whatever
criteria he or she sees fit so long as the bonus payments are not
pursuant to any prior contract, agreement, or promise. In the absence
of any prior contract, agreement, or promise the employer maintains
his or her ?discretion? to offer or decline to offer the bonuses, as
he deems appropriate.

I hope you find that my research exceeds your expectations. If you
have any questions about my research please post a clarification
request prior to rating the answer. Otherwise, I welcome your rating
and your final comments and I look forward to working with you again
in the near future. Thank you for bringing your question to us.

Best regards;
Tutuzdad ? Google Answers Researcher


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Sounds illegal to me.  I'm not a lawyer, but you can't penalize
someone for being injured on the job.  I believe a worker who
challenged this practice would easily win his case.

Seems legal to me since the employer doesn't have to give any bonuses
at all (barring a contract). So I think they can put whatever criteria
they want on it.

research_help-ga, lack of reward is not necessarily a penalty.

joe916: No, they cannot put any criteria that they want on bonuses.
See http://www.eeoc.gov/policy/docs/compensation.html#C.%20Non-base%20Compensation

Surely being away from the job for any reason is valid enough and
non-discriminatory.  I don't think layabouts are a protected class. 
Most people milk workers comp for all they can get.

I could not find where the site Kingal-ga mentions refers to this kind of bonus.
Reducing the bonus for employees who received workers compensation may
be legal, but if the lost time was indeed job related, I expect that
the bad feelings towards to the employer  - not just of those
individuals -  would somewhat undermine the gesture of the bonus.

Actually, as opposed to the official answer and some comments, I
believe I am correct. It IS ILLEGAL to have a job related injury
considered as a criteria not to give an employee a bonus.  This is
backed up by a court ruling this week where an ABC reporter was
awarded a large settlement because the network chose not to renew his
freelance contract because he elected not to travel to Iraq.  The
court ruled that a "lack of reward" is equal to a penalty.  You can't
penalize an employee financially because of an injury received on the
job.

Surely you don't believe that you could choose to deny a bonus for any
reason as you have stated! Obviously you could not choose not to give
bonuses to homosexuals or African Americans, however in your answer
you assert that to be the case!  I believe tutuzdad and some
commenters do not fully understand the issues at hand and therefore
the answer given, as well as some comments, are incorrect.

myoarin: Sorry if I was unclear. I wasn't referring to this question
in particular, but the assertion that the employer can use any
criteria they want.

Perhaps it is intended to be implicit within the original answer, but
it is certainly not lawful for an employer to grant or deny a bonus on
the basis of factors deemed to constitute unlawful discrimination -
e.g., race, gender, ethnic or national origin, religion, or color.

Beyond that, many states make it explicitly illegal to discriminate on
the basis of workers' compensation claims. California, for example,
has legislated:

-------------------------
California Labor Code, Section 3751

(a) No employer shall exact or receive from any employee any
contribution, or make or take any deduction from the earnings of any
employee, either directly or indirectly, to cover the whole or any
part of the cost of compensation under this division.  Violation of
this subdivision is a misdemeanor.

   (b) If an employee has filed a claim form pursuant to Section 5401,
a provider of medical services shall not, with actual knowledge that a
claim is pending, collect money directly from the employee for
services to cure or relieve the effects of the injury for which the
claim form was filed, unless the medical provider has received written
notice that liability for the injury has been rejected by the employer
and the medical provider has provided a copy of this notice to the
employee.  Any medical provider who violates this subdivision
shall be liable for three times the amount unlawfully collected, plus
reasonable attorney's fees and costs.

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab&group=03001-04000&file=3750-3762
-------------------------

To reduce an employee's bonus on the basis of a workers' compensation
claim would appear to constitute an indirect reduction of the
employee's earnings, in violation of that statute.

As the question was posted by "houstonlarry-ga", I thought it was
worth a quick check of Texas law as well:

-------------------------
Texas Labor Code § 451.001.  DISCRIMINATION AGAINST EMPLOYEES 

PROHIBITED.  A person may not discharge or in any other manner
discriminate against an employee because the employee has:

(1)  filed a workers' compensation claim in good faith;   
                    
(2)  hired a lawyer to represent the employee in a claim;

(3)  instituted or caused to be instituted in good faith a proceeding
under Subtitle A;   or

(4)  testified or is about to testify in a proceeding under Subtitle A.

http://www.capitol.state.tx.us/statutes/docs/LA/content/htm/la.005.00.000451.00.htm#451.001.00
-------------------------

To reduce a workers annual bonus on the basis of filing a valid
workers' compensation claim would appear to constitute prohibited
discrimination against that employee.