What an Employee Can do if Their Employer Withholds Their Bonus


What an Employee Can do if Their Employer Withholds Their Bonus

Workers in various industries have always been drawn to sales commissions on the front office as well as bonuses from the back office. Sales staff will carefully determine the amount of their commissions and track their net payout. Employees who are not involved in sales can be given a bonus not associated with a predetermined schedule or scale.


People may come to depend on their bonuses as part of their anticipated income. In many cases, an employee not getting their bonus can cause them serious financial harm. When someone has a significantly lower bonus or is not given an amount they deserve, they should speak with their supervisor. If this is not satisfactory, they should contact a representative in the company’s HR department. It is possible for these employees to be told the company didn’t have to pay them anything because a bonus is discretionary. This is possible, but there are laws designed to protect the rights of individuals who have not been fairly compensated.


It is possible for Los Angeles bonus disputes lawyers to help an employee sue and recover the bonus amount they deserve. In many cases, their lawyers will use the common law theory for breach of implied or expressed contract. California employment laws provide protection for employees in this situation.

Contractual Obligation

Courts are showing they have an increasing desire to identify schemes involving companies that claim their bonus program is discretionary income, but their program meets the criteria for being a contractual obligation. Courts are now taking steps to consider all facts relative to such cases. This includes determining if it has been a company’s historical practice to regularly pay bonuses to its employees. Should a company have done this, a court may determine paying bonuses represents a contractual agreement between them and their employees. It is possible a court could determine a company is contractually required to pay a bonus. In this case, if a company fails to pay the full amount of the bonus, they could be held in breach of contract.

California Law

Los Angeles bonus disputes lawyers know in the state of California, there are two different types of bonus categories. One is discretionary and the other is non-discretionary.

Discretionary Bonuses

These are considered sums paid to an employee as a gift on a holiday or another type of special occasion. They are often given as a reward for good service. These bonuses are not measured or calculated based on work product or efficiency. They are not intended to be used for determining an employee’s regular pay.

Non Discretionary Bonuses

These bonuses are based directly on a company’s work-performance policy. They could be part of a written employment contract, implied company obligation or a verbal agreement. These bonuses are based on job performance, are measured and could be based on sales, revenue targets or other types of accomplishments that are pre-determined.

Bonuses Paid Timely

An earned bonus is considered the same as wages in California. According to California Labor Code 204, an employee is entitled to receive timely payment of their bonus. It must appear on an employee’s pay statement as it is subject to withholding taxes.

Bonus After Termination

The law protects an employee’s bonus even if they are terminated. A Los Angeles employment lawyer knows when an employee is terminated, they are legally entitled to be paid their earned bonus. According to California Labor Code 201, when an employer fires an employee, the employee’s earned and unpaid wages at the time of their termination are payable and immediately due. A bonus dispute attorneys Los Angeles can help make certain an employee gets their earned and unpaid wages if they quit their job. They must be paid 72 hours from the last day of employment or immediately if the employee gave 72 hours notice.

Fraudulent Inducement

In this situation, an employee can argue an employer never intended to pay them a bonus they offered. An employee can show the employer offered a bonus as part of a deliberate trick to get their work product. A bonus dispute attorneys Los Angeles can help represent an employee who is the victim of fraudulent inducement. To be successful in this situation, it will require an employee to prove an employer’s intent was to deceive them. It is possible for an employer to claim they intended to pay the bonus, they just didn’t have sufficient funds to cover it.

Lesser Value Or Deferred Bonus

Bonus dispute lawyers can help an employee if their employer is not able to pay a bonus because of the company’s financial condition. Los Angeles employment lawyer can help an employee sue them over the bonus. They may be awarded a deferred bonus or a bonus of lesser value. In this situation, getting a deferred bonus or one of lesser value may be better than not getting any money at all. This is something that can occur in any economic climate. Bonus dispute lawyers know employee bonuses are becoming an important part of the current work culture. It is often used as a tool by employers to boost productivity and improve the company’s ability to compete within their industry. It is important that employers know the laws covering bonuses in California and makes certain they are able to comply.