When are you entitled to them, and when are they gifts?


When are you entitled to them, and when are they just gifts?


First of all, in most companies, bonuses are luxury items, not entitlements. They might be given as a reward for a job well done, or to acknowledge the closing of another year in business, or in light of a company’s recent financial successes. Those are discretionary bonuses and, although they may have been routinely or historically given, they can usually be withheld without recourse.

Other times, however, bonuses are built into an employee’s compensation scheme, are designed to supplement regular wages and are calculated based upon metrics such as departmental profitability or individual sales levels. These bonuses are usually non-discretionary, meaning that, once the employee (or department, or company) meets a particular threshold/quota, the bonus must be paid. These bonuses are set entirely by contract between employer and employee and are strictly interpreted, but that doesn’t mean an employer can reduce a worker’s bonus on any basis whatsoever. For example, employers are generally prohibited from deducting for cash shortages, breakage or loss of equipment unless the employer can show that the loss was caused by a dishonest/willful act or the gross negligence of that employee. Moreover, in many situations, employers cannot reduce a bonus for reasons outside of the employee’s control. What this means is that determining whether a particular bonus plan is legal may not be obvious to the average citizen–and that you should investigate further. That’s where we come in!

The legal system is set up to “level the playing field” and give workers the power to correct workplace abuses. Cole & Van Note has served California’s workforce for decades as one of the state’s most respected workers’ rights law firms and has recovered massive and record-setting settlements/judgments for employees for workplace abuses.

For a confidential discussion of your rights against a former or current employer, contact us for more information.

This information is for illustrative and educational purposes only. It should not be construed as legal advice, the establishment of an attorney-client relationship, or as indicative of a particular outcome regarding any legal issue you might have.


Information is power.