Being fired just before a bonus or commission payment is set to land in your bank account is among the most frustrating and infuriating situations that an employee can face. It is likely to leave you wondering: Can they really do that?
There is some good news for working people in Washington. State law gives you strong rights and protections when it comes to commissions and bonuses you have already earned. That said, whether you can force your employer to pay that money after you are fired depends largely on the specific situation, including the terms of your contract and any company policies.
At Justice Law Corporation, we help working people ensure that they are fully paid and that their rights are protected on the job. Our Washington wage and hour attorneys have dedicated their careers to fighting back against employers who violate the law. We can help you understand your rights and take action. Our track record of successful results speaks for itself.
If you had already earned a bonus or commission through your work, your employer generally cannot legally take it from you. Even if they fire you before making the payment. Here is what you need to know.
Washington Pay Laws
Washington has some of the strongest wage protections for working people in the country. State laws require employers to pay employees all of the wages they are owed.
That includes paying employees who voluntarily leave the job, are laid off, or are fired. And it is not just hourly wages and salaries. Employers also must pay workers commissions, bonuses, and other compensation they have already earned.
Workers who have been denied full payment have the right to pursue legal claims against their employers, seeking the unpaid compensation and other remedies. Employers who intentionally withhold compensation may be required to pay a penalty equal to twice the amount owed.
Commissions and Bonuses: Did You Already ‘Earn’ It?
Many people wrongly assume that whether an employer has to fork over your commission or bonus cash on the way out the door depends on whether the payment was scheduled to be made before or after you left. The actual question in these situations is whether you already “earned” the payment before your last day on the job.
Employers must pay all compensation that you have already earned. They are not, however, required to pay compensation for any unearned portion.
Here is what that means for commissions and bonuses.
Commissions
People who work in sales positions and other commission-based roles in Washington have fairly clear rights regarding when such compensation must be paid. Specifically, your employer cannot simply deem commissions unearned just because they were not paid before your employment ended.
Take, for example, a salesperson whose efforts generated a sale before their termination. This person has earned the commission related to the sale and must be paid it, even if they are fired before the deal officially closes or the payment is processed.
If the employer fails or refuses to pay the commission, it is in violation of state wage-and-hour law.
Bonuses
Bonuses are often more complicated because they can be structured in many different ways.
A non-discretionary bonus is one where clear criteria are established in advance. For instance, consider a situation in which an employee is offered a $10,000 bonus if they hit $500,000 in revenue by the end of the year. The bonus is considered earned if the employee reaches the revenue target while employed. The employer cannot refuse to pay it simply because they fire the employee before writing the check.
Discretionary bonuses are different: the employer retains full control over whether and how much to pay. A common example is a holiday bonus that varies from year to year and is never promised in advance. Employers generally are not required to pay discretionary bonuses to employees after they leave.
Determining whether a bonus is discretionary or non-discretionary can be a tangled process. If your employer makes a verbal promise to pay a bonus or has a pattern of paying bonuses over a significant timeframe, you may be able to claim that the bonus is non-discretionary.
Retention bonuses are increasingly common. Some bonus plans specifically state that employees must be actively working at the time of payout to receive the bonus. If you are fired just a few days or weeks before a retention bonus payment date, you may have a claim that you are entitled to the payment. That is especially true if your employer’s reason for the termination is not supported by the facts of the situation.
What You Should Do Right Now
There are specific steps that you should take as soon as possible if you believe that you are owed bonus or commission money from your employer.
The first is to gather as much documentation as possible. Get copies of your employment contract, offer letter, commission plan, bonus plan, and pay stubs, as well as any emails or written communications about your compensation. This can help you show your employer that you delivered on your promise and met the conditions for payment.
You should also request your final paycheck in writing to add to the paper trail. Your employer is required to pay all earned wages by the end of the next regular pay period. Send a written request asking for your final wages, including any earned commissions or bonuses.
It is also a good idea to consult an experienced employment attorney. A lawyer can help you determine whether you have a claim and take action to get the money you are owed.
Our Washington Wage and Hour Attorneys Can Help
If you believe that your employer is violating your rights on the job, whether it is by being underpaid or in other terms and conditions, you do not need to go it alone. A Washington wage and hour attorney at Justice Law Corporation can help you evaluate your claim and understand your rights and options.
Our office is conveniently located in Seattle. Contact us at (306) 207-0000 to schedule a free consultation with a Washington wage and hour attorney.
