Unpaid (Medical) Leave - should you not pay de minimis benefits

Hi all -

appreciate if you can help me in this matter:

We have a female employee who has complications with her pregnancy. Even prior to the Maternity Leave, she is already incurring unpaid leaves because her current leave credits are no longer sufficient. She has been in straight unpaid leave for the whole month of July.

We receive, apart from the basic pay, certain amount of De Minimis benefits. We at HR are still crediting the DM, with the rationale that even if she is on an unpaid leave, she is still an employee of the company. The only unpaid portion of her pay is the basic pay (naturally, as she is not reporting for work).

The Exec (expats) are questioning us why we are still giving her the DM benefits. And also, questioning the ff:

1) They want us to stop accruing her leave credits for the months that she is on an unpaid leave
2) They want to stop giving her the DM allowance, and recover from the employee as salary deduction the amount where she was given the DM

Note that our salaries are not on daily basis - we are on monthly base. Our contract says, Php XXX per month, and Php XXX allowance per month.

Questions:
1) Is it legal to STOP the DM allowances and accrual of the leave credits if an employee is on unpaid leave?
2) Is there any provision in the labor law that I can use to counter this move by the company?
3) What other legal steps can the employee undertake to correct this?

Responses are very much appreciated.

Thanks.

1. what benefits in particular? some you can stop. some you can't.
2. has she used her 5 paid leave credits already? then what are you asking about accruing leave credits? Are you really in HR? then why the heck are you trying to counter your employer? you can get terminated if they found out you were even askin
3. depends on the benefit that is being stopped. most benefits can be removed when employee isn't working

lukekyle wrote:1. what benefits in particular? some you can stop. some you can't.
2. has she used her  5 paid leave credits already?  then what are you asking about accruing leave credits?  Are you really in HR? then why the heck are you trying to counter your employer? you can get terminated if they found out you were even askin
3. depends on the benefit that is being stopped.  most benefits can be removed when employee isn't working

1) Benefits - I am referring to her non-taxable allowances. our monthly compensation is composed of 2 things: basic and the the non-tax allowances (de minimis/fringe). as our contract mentions that you receive "php xxx as basic and php xxx non-tax allowance monthly", I construe it as it shall be given to you REGARDLESS if you are on unpaid leave (basic salary is an exception, obviously, as this is earned if you are present). But for the non-tax allowance, I am unsure if this should be treated the same way as in the basic pay.

2) yes, she's used up her earned leave credits. in our company, even if you are a regular employee and has the benefit of 15 leave credits (for example), you cannot use it all up say, in one go. each month, we still have to earn 1.25 days. now, the employee in question is gone for an unpaid leave since july. my take is she should still accrue 1.25 days of leave to her credit. but the company wants us to STOP her earning of the leave credit. to me, this is unfair - as I feel that the conditions on earning leave credits is only either you're regularized (which means you get credits) or you're on probation, and you don't enjoy that benefit. it should not matter if you are on unpaid leave. otherwise, at the end of the year, your total leave credits (if you do not accrue each month) won't be equal to 15 days (which is stipulated on your contract)

3) see answers above. this is the de minimis and the accrual of leave credits.

and yes, I am in HR. And the reason I am asking is so I can glean from other companies' practices as well. This is the first time, only in my current company, have I heard of such a practice - and I want to make sure that we are compliant and we are fair to all involved.

Lyricmuse

To answer your question
1. As you stated, your compensation is composed of basic and non-tax allowances. so this is not a benefit, its a compensation hiding in a benefit package so that the government can't tax it from the employee. since it is a compensation package (basic and non-tax allowances), this is subjected to deduction for non-attendance or absences. since the employee is absent for 1 whole month, the employee should not get any basic or allowance or DM as you may call it.

On accrual of leave, how do you go about this. Our practice the companies that I worked with is what you accrued this year is what you will use next year. If an employee is on maternity leave, he/she doesn't accrue leaves since the leave policy states that you accrue leave credits by the number of months that you have worked. look into your policy and what is exactly stated.

2. I'm with luke, why would you counter this. or maybe you should use the term on how can I enlighten the management that their decision is wrong. You are in HR and your main function is PRO management.

3. Why would you like to know what legal steps can an employee undertake. If you know this would you teach the employee?

mikos23 wrote:Lyricmuse

To answer your question
1. As you stated, your compensation is composed of basic and non-tax allowances. so this is not a benefit, its a compensation hiding in a benefit package so that the government can't tax it from the employee. since it is a compensation package (basic and non-tax allowances), this is subjected to deduction for non-attendance or absences. since the employee is absent for 1 whole month, the employee should not get any basic or allowance or DM as you may call it.

On accrual of leave, how do you go about this. Our practice the companies that I worked with is what you accrued this year is what you will use next year. If an employee is on maternity leave, he/she doesn't accrue leaves since the leave policy states that you accrue leave credits by the number of months that you have worked. look into your policy and what is exactly stated.

2. I'm with luke, why would you counter this. or maybe you should use the term on how can I enlighten the management that their decision is wrong. You are in HR and your main function is PRO management.

3. Why would you like to know what legal steps can an employee undertake. If you know this would you teach the employee?

1) thanks for the response on this.

2) perhaps you're right. it's not so much as to challenge the company policy or practice, but to enlighten them on the issue at hand

3) no, the intention is not for teaching the employee involved. I want to know if there is something she can do, and I want to raise this to the management as a potential risk - so we can prepare for it (if it comes to that point)