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Can I receive Incentive bonus if I resign on Feb & official termination on end Mar ?

Ngoc   Tran's Profile

My company normally pays the incentive bonus based on performance of Jan-Dec on 20-30th March of the next year. The IP payout will be sent to employee to confirm the IP amount on 10th March. In guidelines, it says "Termination: The Participant will only be entitled to an Incentive Payment if they are employed at the time of payment. In the following circumstances, the participant will forfeit the Incentive Payment, regardless of the date of termination: Voluntary termination, Termination for cause, Termination for performance". So, if I submit resignation letter on 15 Feb + 45 days notice (as required by law), my official termination date will be 31st Mar. Can I receive this incentive bonus for my performance in the previous year? Thanks for advs.

Answers

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

You should contact a competent Attorney who will review the entire "guidelines" and give a fully informed and licensed opinion. In the end, the final arbiter of whether you are entitled or not to the bonus would be the courts.

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

Let me start by saying I agree with Wayne. That is the only way you will really know. But now we enter the realm of cost / benefit. How much are you willing to spend for the research and potential fight, which you may or may not win, to recover the bonus?

Two approaches your employer may use to make sure that you are not paid a bonus –

-Claim the bonus is not a sure thing, it is a discretionary piece, and you did not live up to the plan established; and/or,

-As soon as you submit your resignation, they will let you go. This approach is not uncommon when dealing with employees that interact with customers/clients. Your title says Sales.

Look into the 45 day notice requirement. That is usually established for the employer, not the employee, when you are resigning.

I would expect you will lose the bonus.

Jim Schwartz
Title: Corporate financial advisor
Company: Wabash Financial Strategies
(Corporate financial advisor, Wabash Financial Strategies) |

I am unaware of any US legal requirement for an employee to give notice. If you have signed an employment contract, which seems unlikely, the notice provision in that contract would control.

Are you in the USA? It is customary to give two weeks notice of your planned departure but this custom varies widely. As noted, be prepared to be ushered out the door when you give notice.

Rather than spending money for legal advice, which can be costly, the simple solution might be to time your job search and departure to happen after you collect your bonus. This seems the wiser course. If you are planning strategies for an event that is still five months in the future, it implies that your work situation is not untenable and you are not desperate.

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

All good comments above. I would not take a chance and give notice until after you have your incentive bonus in hand. You can be shown the door as soon as you give notice. If you did hire an attorney, there may be other practices the company has used that may not be known by your attorney.

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