When employees leave their jobs, businesses must ensure they pay them for all time worked. Employees usually receive at least one paycheck after their job officially ends. In addition to paying the departing worker’s salary or hourly wages, employers may also need to compensate them for unused paid leave in some cases. Workers may have earned a bonus before they give their two weeks’ notice or during their final days on the job.
Can employers decline to provide a promised bonus because a worker has left their job?
Many bonuses are considered wages
Employers have a legal obligation under the Fair Labor Standards Act (FLSA), a powerful nationwide law, to pay workers fairly based on both statutory requirements and employment contracts. Some bonuses are legally mandatory under the FLSA.
When a worker’s contract includes provisions for bonuses based on their job performance, the company’s performance or how long they keep their job, if a bonus is part of an employer’s contract with a worker or if they provided workers with written information about bonus opportunities to incentivize better job performance, the bonus promised is part of the workers’ wages. It is a non-discretionary bonus that the company has a legal obligation to provide.
Discretionary bonuses are different. If an employer occasionally offers a bonus around the winter holidays, for example, that bonus may be discretionary if it is not part of the worker’s employment contract. Companies can deny workers discretionary bonuses during or after their employment, but they have an obligation to keep their promises regarding discretionary bonuses.
In cases where employers do not fulfill their financial promises, workers may have grounds to file wage and hour lawsuits. Permitting a skilled legal team to review employment contracts and communication with a potentially negligent company can help frustrated workers pursue the bonuses they’ve already earned.