Similar to the wage-and-hour enforcement scheme of many other states including New York, in Illinois, the payment of incentive compensation is largely a matter of contract. Entitlement to incentive compensation, in particular bonuses paid pursuant to a company policy taking into account many criteria, under the governing statute attaches when the terms of the
Bonuses
New York Federal Court Upholds Payment of Overtime Pursuant to Fluctuating Workweek Method Notwithstanding Bonus Pay
By Noel P. Tripp on
Uncertainty and litigation have ensued in the wake of the Department of Labor’s May 5, 2011 Final Rule regarding application of the fluctuating workweek method of overtime compensation (FWW) authorized by 29 CFR § 778.114, specifically the Rule’s commentary on the payment of incentive compensation to employees compensated via FWW. In a thorough recent decision,…
California Enacts Written Commission Plan Law
By Noel P. Tripp on
Posted in Bonuses, California
As discussed by our colleagues at the California Workplace Blog, California governor Jerry Brown has signed into law AB 1396, requiring all employers doing business in California to draft written contracts for any agreements with employees that involve commissions as a method of payment for services. California joins New York in the vanguard…
Circuit Court Confirms That Bonus Structure Based On Hours Worked Did Not Negate Employer’s Compliance With Salary Basis Test
By Noel P. Tripp on
Posted in Bonuses, Exemptions
The “salary basis” test is by far the most straightforward component of the white collar overtime exemptions, requiring only a fixed salary of $455/week (subject to state law) paid in compliance with the requirements of 29 CFR § 541.602. However, an employer’s use of an unusual compensation or bonus structure can still result in allegations that…
SDNY Judge Holds That Express Language In Offer Letter Precludes Bonus Claims
By Noel P. Tripp on
Posted in Bonuses
While in New York all employees are at-will absent contractual language to the contrary, an employer may (intentionally or unintentionally) create a “contract” with an employee governing certain terms of employment (such as bonus compensation) without destroying the at-will nature of employment. Properly drafted and agreed upon, such a contract can preclude employees from later…