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My wife has an annual perfomance bonus as part of their compensation in 2014 and she resigned in Jan. 2015(after working the full year in 2014) before the amounts have been paid out. Is it legal to not pay anything? Thank you!

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Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

You need to talk to an Attorney versed in Labor Law.

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

It is for this reason why employees try not to switch jobs in January, to ensure they receive their bonus compensation. Bonus is not considered salary and is more than likely, termed as discretionary compensation in your former organization. Check your employment agreement, offer letter, or the firm employment procedures. Most likely you will find a clause which states, "the individual must be employed at the organization to qualify for the incentive compensation."

Depending on the expected amount, a labor Attorney may not make sense, for this situation. However, if it is a sizable sum, Wayne's approach is preferable.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

And terminology such as " "the individual must be employed at the organization to qualify for the incentive compensation." " requires an Attorney to review, since it is open to a wide interpretation (at least in a stand-a-lone passage).

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

As the two other posters have mentioned.....it depends on a lot of factors and it will be best for you to consult an attorney.

I will add these...
Since year-end financials don't get done (or close to being finalized) until mid January, the Board still has to approve (even if it is budgeted) the performance bonus and this does not happen until before the month end (if that). And most pronouncements and policy require eligible receivers to be employed at a certain date.

Also bear in mind that employee performance is only 1/2 of the bonus equation. The other half is company performance. Very Good of $0.00 is still ZERO.

To answer your question.... legality depends on a lot of factors/variables. In practice, a lot of companies do this or have it as a policy. As Regis has indicated..."It is for this reason why employees try not to switch jobs in January". Unless it is a guaranteed amount in your wife's employment contract, you should NOT have high hopes in the pursuit.

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