QUESTION
Can my employer refuse to pay me my annual bonus if I quit before receiving it?
Asked on Sep 15th, 2020 on Labor and Employment - New York
More details to this question:
I have been at a company for over a year and was supposed to receive my 5k annual bonus with today's payroll. Someone forgot to pay out the bonus and HR apologized and said it would be included in the next bi-weekly payroll. I was planning on announcing my 2 weeks notice after receiving the bonus as I already have another job pending. The bonus is mentioned in the offer letter I signed with the company and is included as an 'Employee Benefit' with the exact wording being "A $5,000.00 bonus will be paid in the payroll corresponding to the dates in which employee’s anniversary of joining the company is paid. " There is also a sentence however that says "The Company reserves the right to modify its benefits in its sole discretion as it deems appropriate". Does this mean that they can cancel the bonus once I give them two weeks notice even though I am a month past my anniversary?
1 ANSWER
Most employee handbooks are not contracts. Their purpose is to protect employers who may be accused of disparate or unequal treatment of employees. Most employers try to follow the terms of those non-contracts in order to show that they treat all employees the same and that they promote compliance with labor laws.
No lawyer may comment on bonus payments without reviewing/reading your particular policy. However, most policies do state that employees need to be on the payroll when bonuses are paid. A bonus, by definition, is discretionary. That means that employers are not mandated to pay bonuses and they often do so to encourage employees to continue working hard. If you decide to inform your employer that you are leaving, you probably should not count on the bonus. But to be sure, you should pay an employment lawyer to review your policy if you truly believe that you were entitled to the bonus payment.
If you leave and are not paid the bonus you will likely have to sue the employer in small claims court. You may even need to retain a collecitons attorney if the employer does not pay thereafter.
Answered on Sep 17th, 2020 at 7:55 AM