I was going to mention FMLA but SRS beat me to it. And there's no reason for HR to be snotty and rude about it -- it's FEDERAL LAW, not some benefit given by the employer.

Actually, there's no reason to be snotty and rude to people at work at anytime. Angry and/or murderous, perhaps, but not impolite. Remember, ALWAYS wash your hands well after strangling someone because they might have been carrying germs that could make you sick.

It sounds to me like Karen's employer is just trying to make it hard to use FMLA Leave. And she should find out when it "resets" itself -- on January 1 or one year from the date it is first used. If the employer's policy is based on a calendar year (resets January 1) then she started new and fresh when it became 2011.