Legal Question in Employment Law in California

An employee earned a bonus in 2010, and was laid off in 2011. Only a portion of the bonus was actually paid as of the date of separation -- is the now former employer liable for payment of the balance of the bonus?


Asked on 10/07/11, 4:53 pm

2 Answers from Attorneys

Terry A. Nelson Nelson & Lawless

It's entirely up to the company policy and rules, not the 'law'.

Read more
Answered on 10/08/11, 12:30 am

Just to clarify Mr. Nelson's answer, the company is required by law to honor the company's bonus payment policy that was in place at the time the bonus was earned. Furthermore, if the bonus was actually earned as part of a compensation plan, as opposed to a discretionary bonus, it was vested when earned. There are many other types of bonuses, however, including discretionary bonuses and retention bonuses that can legally be cancelled if the employment terminates before payment is due. So the nature of the bonus and the policy or plan under which it is granted will determine whether or not the law requires that it be paid after employment ends.

Read more
Answered on 10/08/11, 11:20 am


Related Questions & Answers

More Labor and Employment Law questions and answers in California