Unpaid wages are among the top reasons that workers file lawsuits against their current or former employers. Miscommunication and unmet expectations are often the underlying causes of wage lawsuits brought by employees.
In some cases, workers expect to receive a bonus that a company doesn’t provide. Do they have the option of suing to demand a bonus when their employer declines to provide it?
There are two different types of bonuses
When evaluating the risk of a wage claim related to a worker’s bonus, the origin of their expectation for a bonus is of the utmost importance. Some bonuses are discretionary. Employees receive them around the holidays because the company did well for the year and management wants to share the good fortune with them. Workers may feel disappointed when they do not receive those bonuses, but they do not technically have a right to demand them.
Non-discretionary bonuses are different. In some cases, they may be part of an employee’s compensation package as outlined in their contract or the employee handbook. Other times, they may be part of a formal program that the company establishes to motivate better job performance.
In scenarios where the company has made a legitimate promise of a bonus in qualifying circumstances, the bonus provided may be non-discretionary. Workers could theoretically initiate a wage claim because they do not receive a non-discretionary bonus promised to them as part of a company-wide program or as a term of their employment.
Reviewing employment contracts, training materials and workplace communications, with a skilled legal team can help employers determine if a wage and hour claim related to bonuses is legitimate. Business leaders may need help assessing a pending lawsuit and updating company documentation to prevent employment litigation in the future, and that’s okay.