The Tenth Circuit Court of Appeals has held that amounts paid for a buy-back of sick leave must be included in the employee’s regular rate of pay for purposes of calculating the applicable overtime rate, while amounts paid for vacation buy-backs need not be included. In Chavez v. City of Albuquerque, 2011 U.S. App. LEXIS 622 (10th Cir. Jan. 12, 2011), the court held that a buy-back of sick leave is akin to an attendance bonus, because it rewards employees for coming to work rather than using sick leave. Including the additional compensation in the regular rate will necessarily result in a higher overtime rate. In addition, it is unclear whether the buy-back payment must be added solely to the compensation for the week in which the payment is made, or whether it must be apportioned over some longer period of time, as is normally required for periodic attendance bonuses. See 29 CFR §778.209. To avoid these problems, employers should consider use-it-or-lose-it sick leave policies, which are generally found to be lawful even when use-it-or-lose-it vacation policies are not.