When an employer permits its employees to participate in a bonus program offered by the employer’s client, based on the work performed for that client, those bonuses do not always qualify as “remuneration for employment” that must be included in the employee’s “regular rate” for purposes of calculating overtime pay due under the Fair Labor
Bonuses
California Supreme Court Adopts State Agency Formula for Calculating Overtime Value of Flat-Sum Bonus, Rejecting Federal View
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Second Circuit Affirms: Business Not Obligated to Pay $350,000 “Performance” Bonus to Prospective Employee Who Never Worked A Day
Last year, a Manhattan federal district judge reviewed a decision of a federal bankruptcy court and held that Lehman Brothers was not required to pay a $350,000 performance bonus referenced in the offer letter of a prospective employee who never provided services. In doing so, the Court observed that the Firm terminated the contractual relationship…
Commissioned Sales Employee Not Entitled To Commission Payment Under The Plain Language Of Incentive Compensation Plan
This blog has stressed (most recently here and here) the importance of carefully drafting incentive compensations plans to avoid unintentionally converting incentive compensation into earned “wages” protected under state law. Another recent decision, this one from the Court of Appeals for the Seventh Circuit reinforces the employer benefits of careful drafting. Lawson v. Sun…
Manhattan Federal Court: Financial Firm Retained Discretion to Award or Not Award Bonus
As we recently noted in our discussion of Massachusetts law, incentive compensation has the potential to become “wages” protected by state labor law once it is “earned.” However, when an employer conveys to the employee that it retains discretion to award or not award incentive compensation in any specific amount, such potential incentive compensation…
Massachusetts Federal Court: Discretionary Bonus Not “Earned” Commission Protected by Massachusetts Minimum Wage Act
An employee’s entitlement to incentive compensation continues to be a litigation issue. Recently, a Massachusetts federal district court held that an employer’s refusal to award an employee a discretionary bonus does not violate the Massachusetts Wage Act. Comley v. Media Planning Grp., No. 14-10032, 2015 U.S. Dist. LEXIS 76383 (D. Mass. June…
District Court Affirms: Business Not Obligated to Pay $350,000 Performance Bonus to Employee Who Never Worked a Day
The importance of detailed drafting of employment documents – particularly those calling for commissions, bonuses or other types of incentive compensation – was highlighted recently by a plaintiff’s claim that, as a conditional hire who never worked a day at now-defunct Lehman Brothers, the Bank’s rescinding of her employment offer triggered its obligation to pay…
Indiana Appeals Court: Club Not “Employer” For Purposes of Commissions Claim
While wage-and-hour laws, like other employment laws. are generally “broad” and intended to foster the goal of worker protection, the scope of such laws is not limitless, as demonstrated by a recent decision from an Indiana appeals court addressing an alleged multiple or joint employer scenario. Rodriguez v. S. Dunes Golf, LLC, 2014 Ind.…
New York State Court Reiterates That Commissions Are Not Wages Until Earned
Ensuring contracts and agreements reflect when incentive compensation – usually “commissions” – is earned is of paramount importance to New York employers who wish to maximize their rights, as evidenced by a recent decision from New York County Supreme Court Justice Ellen M. Coin. Sherwin v Mestel & Co. N.Y., LLC, 2014 N.Y. Misc.…
Clarifying Recent Legislative Amendment, Nebraska Supreme Court Addresses Entitlement To Commissions Under State Law, Contract
As we recently discussed, while the FLSA does not regulate the payment of incentive compensation (such as, for example, commissions and bonuses), many state laws do. In Nebraska, an employee’s right to commissions is governed by a recently amended statute, Nebraska Revised Statute § 48-1229(4). A new decision from that state’s highest court addresses…