What an Employee Can Do if Their Employer Withholds Their Bonus | Mann & Elias
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What an Employee Can Do if Their Employer Withholds Their Bonus

Is Your Employer Withholding Your Bonus? Contact Our Los Angeles Bonus Disputes Lawyers

Workers in many industries depend on bonuses in addition to whatever wage or salary they make. While an employer is not required to offer any bonuses, once an employer promises a bonus or has an existing bonus program, they may become obligated to pay employees who qualify for the bonus.

Contractual Obligation

Courts are showing they have an increasing desire to identify schemes involving companies that claim their bonus program is discretionary, but their program meets the legal criteria for being a contractual obligation. Law 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. A company that does this may have created a contractual obligation to pay bonuses.

California Law

Los Angeles lawyers for commission bonus withholding 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

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. Evaluations 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. An experienced 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. 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.

If you or someone you know is involved in a bonus dispute, we recommend pursuing legal representation. At Mann & Elias, we have over 40 years of combined experience helping employees in disputes with their employers. We can help with any bonus dispute you may have.


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