Re: bonus payout issue

More | Report Post

On 9/18/08, arjay wrote:
> I live in NJ but work for a firm based in MA. At this
> firm, employees are allowed to participate in a
> productivity bonus program which is all spelled out in the
> employee handbook. Each month, an employee can earn 1pct
> of his/her annual gross pay if he/she satisfies
> productivity goals. No issue there. However.... the
> *payout* of these bonuses occurs one quarter *in arrears*
> as long as the employee is on payroll....

to earn the payout, there are two conditions:
1. meet goals this month
2. be employed at the end of the quarter

this means the bonus really isn't "earned" in the month that
you meet the goals. it isn't earned until the end of the
quarter (when the 2nd condition is satisfied).

so, when you work your last quarter, you don't get the bonus
for that last months (since you haven't completed the 2nd
requirement). employers aren't required to pay bonuses until
all conditions have been satisfied.

thus, the 2nd condition acts as a "retention bonus" program.
you get more money working for the company (based on your
sales) as long as you continue to work for the company in the
following months.

ON THE OTHER HAND...

some states (like California) look with suspicion on bonus
plans that delay payments for no good reason. basically, if
the salesman did all the stuff he was supposed to do, the
employer owes the bonus, even if the salesman terminates
(quits or is fired) after the sale is completed.

the theory is: "the one who shakes the tree gets the fruit."
so, unless the salesman is supposed to deal with customer
complaints, billing, etc., after the sale, once the sale is
complete (the salesman's job is over), the bonus is owed even
if the salesman is no longer employed. thus, in California,
some salespeople collect bonuses/commissions months after
they're no longer employed by the company.

IN OTHER WORDS....

you may or may not have a claim. it depends on how your
compensation (bonus) plan is worded, as well as your state
law.

good luck.