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BusinessColumnistsCarrie Mason-Draffen

Sick time use can be tied to pay increases

Company sick time policies vary. In some places,

Company sick time policies vary. In some places, employees are penalized in their raises for taking even a day. (Undated) Photo Credit: iStock

DEAR CARRIE: My employer states that employees accrue sick time monthly and that they can carry those sick days forward from year to year. That sounds good. But easy come, easy go.

Employees lose any accrued sick time if they leave the company. And if they use even one of their sick days, they face lower annual salary increases. For example, if an employee were in line for a 4 percent increase, that would drop to 3 percent if the person took a sick day.

And the more sick days they take, the more the raises decrease. Is this legal? How can the company state that it offers paid sick time as a benefit and then penalize any employee who needs to use it? I have worked here for several years and have yet to take a sick day because of this punitive policy. -- Unusable Benefits

DEAR UNUSABLE: The policy may seem punitive, but it's probably legal, unless it conflicts with a union contract or other employment agreement.

State labor laws don't require employers to offer paid time off. So when they do offer the perk they set the terms.

" . . . Where an employer does provide paid sick days, the company may establish whatever terms and conditions it sees fit for the policy," said employment attorney Jeffrey Schlossberg of Ruskin Moscou Faltischek in Uniondale. "Therefore, it is legal for a company to state that accrued sick days -- even if carried forward year to year - may be forfeited upon termination of employment."

But labor law does require that the policies be in writing, Schlossberg added.

And it is legal to tie sick-day use to salary increases, he said. In fact, he sees the link as a motivator.

"The company is not penalizing employees for using sick days," he said. "Rather, the company is trying to provide its workforce with an incentive to take fewer sick days along the lines of a perfect attendance award."

It would seem unfair, however, that an employee who does stellar work all year would face a lower annual raise because he or she was out ill. Even though the policy is legal, you and co-workers should consider talking to a supervisor about what might be an unintended injustice. 

DEAR CARRIE: A month ago I started a new job. The company pays for my health insurance but deducts my wife's health insurance premium from my salary, something we agreed on.

What we don't agree on is how the company makes the deduction. It doesn't take it pretax. So it seems that I am paying taxes on my wife's insurance. That doesn't seem fair. Shouldn't the company reduce my gross salary by the amount of her insurance and compute taxes on that income? -- Unbeneficial Taxes

DEAR UNBENEFICIAL TAXES: I checked with the Internal Revenue Service for an answer. Your company's approach isn't unusual, an IRS spokeswoman said.  The pretax issue doesn't come into play with your benefits because your employer pays for them, and they aren't considered part of your income under IRS rules. In other words, if you made $1,000 a week, the cost of the health benefits you receive wouldn't bump up your income, the spokeswoman said.

Under a "cafeteria plan," or benefit plans that offer eligible employees options, such as pretax benefits, if you made $1,000 a week and paid $100 toward benefits for yourself or your wife, then you would be taxed on just $900 of income.

On the other hand, if the company offers no such plan -- which might be your situation -- then you might not get the pretax benefits for premiums you paid. But you could deduct the cost of health premiums from your taxes, up to 7.5 percent of your adjusted income, the spokeswoman said.

For more information call the IRS at 800-829-1040.

For more on "cafeteria plans"  (Click here to visit

irs.gov/govt/fslg/article/0,,id=112720,00.html#1)

For more on medical deductions, (Click here to visit  irs.gov/publications/p502/index.html)

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