Well-compensated employees often have contracts that include generous benefits based on their personal performance or the employer’s profits. Other times, workers may receive bonuses around the holidays as a way of sharing the company’s good fortune with them.
If an employer does not provide the usual bonuses that workers have previously received, those workers may feel frustrated about the unexpected loss of income that they may have counted on when budgeting.
Can workers who do not receive their bonuses as usual pursue wage claims against their employers to obtain those bonuses?
There is more than one type of bonus
The legal classification of the bonus determines whether or not workers have the right to initiate wage claims for the non-payment of the bonus. When the bonus is part of their employment contract and therefore their contractual pay, it is a non-discretionary bonus. Employees can likely pursue wage claims for a company’s refusal to honor the bonus structure outlined in their contracts.
Additionally, if a company establishes a widespread bonus program to incentivize workers or promote employee retention during a difficult time, those specific, promised bonuses are non-discretionary. Workers can file lawsuits seeking those unpaid bonuses.
However, if the company simply offers holiday bonuses without including a promise for that extra pay in a contract, the business can stop paying those bonuses at any time. They are discretionary bonuses that are a form of employer generosity and not part of the worker’s wages.
Reviewing employment contracts and company communications outlining new bonus programs with a skilled legal team can help workers classify their bonuses. A wage claim could help in scenarios where bonuses are non-discretionary and are, therefore, part of the workers’ wages.
