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Can you take action against your employer for an unpaid bonus?

On Behalf of | Jul 14, 2020 | Business Law

Many companies use bonuses as a way to motivate their employees to offer the best job performance possible. Performance-based bonuses are a common tool for those in sales and managerial positions in particular. When employees meet certain goals, the company may commit to giving them extra compensation.

Whether you needed to sell a specific number of units in a given week or had to meet certain corporate standards for sales when compared with staffing hours, qualifying for a bonus can be a big motivator to give your job your full effort. Some employees even count on bonuses as part of their monthly budget.

What happens if your employer does not follow through with their promise of a bonus? 

Are the bonuses in your contract or in written documents from a company?

Sometimes, bonuses are an integral part of a company’s pay structure, which means that the system the company uses for awarding bonuses may be part of the employment contract you signed when you first took the job or accept a promotion.

Other times, companies may introduce bonuses to incentivize compliance with new programs or increase staff morale and possibly sales as a result. Although you can in theory attempt to bring a claim against your employer for an unpaid bonus promised verbally, it is typically much easier to validate your claim to an unpaid bonus if you have a written record about the bonus program.

Depending on the circumstances, you may have to handle your claim differently

In some cases, an unpaid bonus is a clear-cut example of a wage violation as the bonus is part of the innate pay structure that an employee agreed to at the time of their hiring. Other times, an unpaid bonus might represent a contractual default rather than a specific wage issue.

Reviewing your employment contract, compensation paperwork and other critical documents related to your job can give you and any legal professional that you work with a better idea of how to broach the issue and negotiate a resolution with your employer.

If you are unable to resolve the issue through direct negotiations, you may have to go to court and ask a judge to take action on your employment law claim regarding the unpaid bonus.