Questions About Employee Bonus
Bonus is a compensation that an employer pays to an employee as recognition for the work performed. This is apart from the employees salary or wages. Bonus received may vary from one employee to the other, which generally raises questions about an employees rights and bonus laws. Below are a few questions that have been answered regarding employee bonus:
Q. Is an employer allowed to alter the bonus policy without informing the employee?
In the absence of an agreement or a contract between the employer and the employee with regards to this aspect, the employer may change the bonus policies. Absence of a contract would mean that it is an at will employment where the terms of employment can be changed or the employee can be fired without giving any notice. However, the employer should not have breached a public policy or discriminated against the employee. It is not required that a change to the bonus policy be made after consultation with the employee. If there is a written agreement indicating that the bonus payment will not change; then it is the employers responsibility to pay it. If the employer does not pay, the employee may file a suit against the employer for non-payment of bonus. If bonus was paid as a practice and not as a part of an agreement; then the law cannot force the employer to pay.
Q. Is the employer obligated to pay the bonus earned by the employee even after the employee has resigned?
If there is no employment contract regarding the payment of bonus, then the employer is not required to pay bonus when an employee resigns and it is completely up to the employer to pay or not. However, if there is an agreement to the effect that the earned bonus would be paid under any circumstance; then the employer is legally bound to pay it.
Q. If in error, an employer mentions on the check that the payment is for the bonus earned instead of showing it as an advance payment; is the employee required to return it?
Advance payment is a payment that is made for a work that still needs to be finished. However, bonus is a payment for the work that is already done. If there was an advance that was paid (in error or not); the employee is required to refund it. In the event that an employee refuses to repay the advance payment; the employer may terminate the employee and file a suit against him/her.
Q. Can an employer hold back earned bonuses of an employee in the state of Texas?
The commission, bonus or money that is earned by the employee cannot be held back by the employer. The employee may file a wage and hour complaint with the Texas Workforce Commission (TWC) if money is held back by the employer. The TWC will then approach the employer to investigate the complaint. If the employees claim is valid, the employer would be required to pay the money.
Q. Is it required by law to provide the calculation of the bonus amount to contracted employees if and when a bonus is paid?
The employer may decide on the amount of bonus to be paid (if any) or if the calculation needs to be provided in the event that there is no written employment contract. However, if there is a written agreement detailing the terms of the bonus and if it states that the calculation should be provided; then the employer should honor it. The employee should read the agreement carefully to understand the terms.
Employees may have doubts on their rights with regards to bonus and the laws relating to it. They may ask an employment lawyer, colleague or a friend for help in understanding the laws.
Q. Is an employer allowed to alter the bonus policy without informing the employee?
In the absence of an agreement or a contract between the employer and the employee with regards to this aspect, the employer may change the bonus policies. Absence of a contract would mean that it is an at will employment where the terms of employment can be changed or the employee can be fired without giving any notice. However, the employer should not have breached a public policy or discriminated against the employee. It is not required that a change to the bonus policy be made after consultation with the employee. If there is a written agreement indicating that the bonus payment will not change; then it is the employers responsibility to pay it. If the employer does not pay, the employee may file a suit against the employer for non-payment of bonus. If bonus was paid as a practice and not as a part of an agreement; then the law cannot force the employer to pay.
Q. Is the employer obligated to pay the bonus earned by the employee even after the employee has resigned?
If there is no employment contract regarding the payment of bonus, then the employer is not required to pay bonus when an employee resigns and it is completely up to the employer to pay or not. However, if there is an agreement to the effect that the earned bonus would be paid under any circumstance; then the employer is legally bound to pay it.
Q. If in error, an employer mentions on the check that the payment is for the bonus earned instead of showing it as an advance payment; is the employee required to return it?
Advance payment is a payment that is made for a work that still needs to be finished. However, bonus is a payment for the work that is already done. If there was an advance that was paid (in error or not); the employee is required to refund it. In the event that an employee refuses to repay the advance payment; the employer may terminate the employee and file a suit against him/her.
Q. Can an employer hold back earned bonuses of an employee in the state of Texas?
The commission, bonus or money that is earned by the employee cannot be held back by the employer. The employee may file a wage and hour complaint with the Texas Workforce Commission (TWC) if money is held back by the employer. The TWC will then approach the employer to investigate the complaint. If the employees claim is valid, the employer would be required to pay the money.
Q. Is it required by law to provide the calculation of the bonus amount to contracted employees if and when a bonus is paid?
The employer may decide on the amount of bonus to be paid (if any) or if the calculation needs to be provided in the event that there is no written employment contract. However, if there is a written agreement detailing the terms of the bonus and if it states that the calculation should be provided; then the employer should honor it. The employee should read the agreement carefully to understand the terms.
Employees may have doubts on their rights with regards to bonus and the laws relating to it. They may ask an employment lawyer, colleague or a friend for help in understanding the laws.
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