Federal wage laws protect a worker’s right to their salary or their hourly pay for the time that they work. Employees can file lawsuits when their employers do not pay their wages, pay them less than minimum wage or violate overtime pay rules.
Employees may receive hourly wages or a salary as their base pay. The terms included in an employment contract may augment that base pay with benefits, sales commissions and bonuses. Bonuses included in employment contracts are considered part of a professional’s wages. Their employers typically cannot refuse to pay them bonuses, provided that the worker clearly meets the criteria for being eligible for the bonus at issue.
Performance-based bonuses may technically be wages
Some bonuses offered by companies are discretionary or voluntary. If the company shares quarterly profits with workers or offers a small annual holiday bonus, leadership within the organization can decide when and if to provide workers with that augmentation of their wages.
However, bonuses are non-discretionary in cases where they are part of an employee’s contract. They are then subject to federal wage rules that govern employee compensation. Additionally, if the company announces a bonus program intended to help retain workers or incentivize better job performance, the bonuses offered in that scenario are also typically mandatory and part of a worker’s wages.
When companies refuse to honor promises to provide non-discretionary bonuses to employees, the workers denied the pay they earned may have grounds for a wage lawsuit. Reviewing communications with one’s employer and/or a contract explaining its bonus program – with the support of a skilled legal team – can help workers determine if they are in a strong position to take legal action to pursue an unpaid bonus.