Can an Employer Ask You to Give Back a Bonus?

by Tyler Lacoma; Updated September 26, 2017
Money down the Drain

Bonuses are incentives that companies provide to their employees above stated salaries. They are a common form of incentive for managerial jobs and other higher-level positions, but are not necessarily guaranteed by the business. Depending on how and when an employee leaves a company, the business may be able to legally reclaim a bonus check.

Depends on the Contract

An employer can definitely require you to give back your bonus after you have left work. While you are still at work, it is a much rarer occurrence. In both cases, the actions of your employer are based on the contract you signed when starting your job. This contract governs bonuses, when you receive them, how much they are, and what actions can allow a company to reclaim the bonus. Leaving a company suddenly is a common reason cited in contracts as are various forms of misconduct.

Bonus and Commission

There is a difference between a bonus and a commission. A commission is part of your compensation and is much more difficult for a business to reclaim, since you earned it. A bonus is more akin to a gift, and is not tied to your compensation.

Legal Precedence in Your State

Legal precedence in the state in which you work can have a significant impact on whether an employer can take back your bonus, as can federal legislation. The Wage Payment Act made room for employees to keep their bonuses. If the business contract clearly states what employees must do to receive the bonus, and you fulfilled all qualifications, even if you have left the company you may be able to keep the bonus. If the law is not clear or if you have not followed business regulations precisely, though, the business may be able to take back the bonus. States have a variety of formulas and qualifications they use in these cases.

Timing May Be Everything

Your receiving your bonus may rely on your timing in giving notice. Bonuses that are scheduled to be paid on a date before you leave the company are yours and may not be reclaimed as long as you did not violate your contract. Bonuses that come due after you quit, though, will often be reclaimed by your employer.

About the Author

Tyler Lacoma has worked as a writer and editor for several years after graduating from George Fox University with a degree in business management and writing/literature. He works on business and technology topics for clients such as Obsessable, EBSCO, Drop.io, The TAC Group, Anaxos, Dynamic Page Solutions and others, specializing in ecology, marketing and modern trends.

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