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If an employee receives a bonus, can an employer require a percentage be returned to it even though there is no signed contract?
Anonymous5 views3 answers
The employee received this bonus. Taxes are already taken out. The salesmen have signed a contract stating if a company gets special pricing they will pay if back. However, the employee I am talking about is behind the scenes woking w/the companies setting up their telecommunications. Say 6 months down the line something changes w/that company, the individual must pay back some of that bonus. These are the ones who are being required to pay it back as well. None of them have a signed contract agreeing to this.
It's not possible to be perfectly detailed, because the circumstances sound fairly complex. All I can do is to tell you the general rule: Generally speaking, once you earn wages, then they're yours. And generally speaking, a bonus, once paid, is a wage.
Given the general rule, this sounds like it would be illegal. But there can be exceptions. Since you mention a contract, n attorney would need to see the contract to give you a good answer. (If you have read it yourself, be aware that not every contract is legal. Even if your contract says that you have to return the money, that provision may not be enforceable.)
Once paid as net wages and after tax/FICA withholding, I cannot see how an employer can legally "take it back" due to some non-contractual, non-regulatory contingency/trigger event. Should the employer attempt to recoup the "bonus" pay by withholding future earned pay, by demotions or other job actions, an immediate call by the employee(s) to the Mass. Attorney General's Fair Labor Hotline at (617) 727-3465 is in order. Note that the employer may call the payment a "bonus" because it is tied to sales performance. But, if the payment is mathematically determinable it is actually a commission under recent case law. The rub here is, you refer to non-sales personnel who did not actually "earn" the pay, but are benefiting from something akin perhaps to company-wide profit sharing or residual profits so long as the contracts are continued by the customer. Though bonuses are unsettled law in MA, it seems that "profit sharing" programs may be cast as bonus pay by some employers to avoid application of the MA Wage Act treble (triple) damages provision. It will take a test case or two before we have more definition. Perhaps your situation is one of them.
Just note that the Massachusetts Wage Act does allow an employer to take a valid offset from wages under certain circumstances. Generally, offsets need to be agreed to in writing, which appears not to be the case in your situation. You should consult with an employment lawyer on these issues as the devil is in the details.
