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Do you have rights if your employer doesn’t pay your bonus?

On Behalf of | Nov 4, 2019 | Firm News

Top executives and sales professionals receive competitive pay to attract them to work at a company. Many businesses will go a step beyond that in order to incentivize the best possible performance for their staff. In addition to base pay and commissions, some successful companies offer performance-based bonuses to sales staff, executives and managers.

These bonuses can represent a significant amount of a worker’s annual income. It is not uncommon for those hoping to secure a bonus to go above and beyond for their employer in terms of the number of hours worked and how much effort they make at the company. When you fulfill all of the obligations to secure a bonus and your employer doesn’t pay it out, it can feel like a betrayal.

Provided that you have a written contract or documentation of the bonus structure, refusing to pay a promised bonus could be a violation of your wage rights as a Colorado employee. That means you can hold your employer accountable for their lack of follow-through.

Documenting the promises made and your work will support your claim

The more informal the bonus program, the harder it can become for you to enforce it. If your employer makes a verbal announcement at the holiday party that the sales person who finalizes the most contracts before New Year’s Day will receive a 10% commission bonus, unless you videotape it happening, you may find yourself struggling to validate your claim to the bonus in court.

On the other hand, a bonus offered in writing as part of your annual contract or as a component of your performance review depending on your scores is easier to prove in court. You will want to have sales and performance records that support your claim that you met all obligations that your employer required for the bonus.

Whether you met staffing goals for the last quarter, exceeded sales expectations or improved customer retention, provided that there is a written bonus structure, even something sent out in an email or memo, you can push back when your employer doesn’t pay what they promise you.

Holding companies accountable can prevent future unpaid bonuses

When your employer does not pay you what they agreed and promised to pay you, they violate the terms of your employment and reduce what you earn under your contract with them. Some companies only do this kind of thing occasionally, while for others it is standard practice.

Some companies use bonuses because they assume that employees will simply leave the company when they don’t follow through on their promises, which may not seem like a red flag to other potential employees in high turnover positions such as sales.

By taking action against an employer who refuses to comply with their own bonus and compensation promises, you stand up for yourself and your worth as an employee. You also reduce the likelihood of any such issues occurring for people who work for the same company in the future.