Almost every company running an incentive scheme has at some point considered tying it to attendance. The logic looks unimpeachable: if we reward performance, let’s also reward showing up. A recent ruling sets clear limits on that idea, and it’s worth understanding them before next year’s objectives campaign.
What the ruling says
The criterion is direct: incentive calculations may not be reduced on account of absences due to illness, nor absences linked to work-life balance and family care. The ruling does not deny that absenteeism is a legitimate management concern — it expressly accepts that it should be tackled — but it specifies how: without breaching the Constitution, Spain’s Law 15/2022 of 12 July on equal treatment and non-discrimination, or Organic Law 3/2007 of 22 March on effective equality between women and men.
That triple anchoring explains the substance. Financially penalising sick leave means treating someone worse for being ill. And penalising care-related absences produces an effect that practice confirms repeatedly: it falls disproportionately on women, who still take the majority of care leave. Even where the incentive design is formally neutral, the outcome is not. That is, technically, indirect discrimination.
Where the red line sits
The practical distinction runs as follows. An incentive scheme may measure results, productivity, quality or achievement of objectives. What it may not do is turn illness, or the exercise of a care-related right, into a factor that reduces pay.
Be careful, because the penalty is often hidden. You don’t need a clause saying “deducted for sick leave”. An objective set in absolute terms — units produced per month, deals closed per quarter — that is never pro-rated when someone has been absent for a protected reason produces exactly the same effect, and attracts the same analysis.
How to redesign your incentive scheme
Three adjustments resolve most cases. First, pro-rate objectives against time actually worked rather than holding the full figure: someone absent for two months answers for ten, not twelve. Second, measure in relative terms — ratios, conversion rates, quality per unit — instead of absolute volumes, which are far more sensitive to absence. Third, reread the small print in your tables and annexes, where clauses inherited from years ago tend to survive unexamined.
Closing
A badly designed incentive scheme doesn’t just create claim exposure; it sends an internal message no company wants to send — that falling ill or caring for someone carries a price. If your organisation is preparing its objectives campaign, this is the right moment to review the design properly. At EBF we can help you keep your incentive scheme demanding without leaving it exposed. Get in touch and we’ll go through it.