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Marsha411JD, Attorney
Category: California Employment Law
Satisfied Customers: 20227
Experience:  Licensed Atty, 29 yrs exp in the practice of law.
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Question regarding an incentive bonus plan payout when Employee

Customer Question

Question regarding an incentive bonus plan payout when Employee quits before the planned pay out date.
My former company pays an incentive plan bonus to employees. The pay-out date is in April of the following year (so the 2014 pay-out was April 2015). The plan language specifically states that employees must be employed with the company on the pay-out date to receive the bonus.
I quit 2 weeks before the pay out date (dumb, I know) but was wondering if my former employer's plan is compliant with CA law. Section 35.2 of the DLSE manual states that "an employee who voluntarily leaves his employment before the "BONUS CALCULATION DATE" is not entitled to receive.......
My question is what specifically is the "bonus calculation date"? I quit before the pay-out date, but are these the same thing? Could it be that the calculation date was earlier and I was working for them at that time, hence entitled to the payment?
Submitted: 2 years ago.
Category: California Employment Law
Expert:  Marsha411JD replied 2 years ago.
Thank you for the information and your question. If you continue to read in the Manual that you are referring to, you will see that as long as the employer specifically conditions the receipt of a bonus on continued employment until the pay out date, then if the employee voluntarily leaves before that date, the employer is not required to pay them a bonus. Please read 35.2 and 35.3 on page 123 of the manual.
So, the "bonus calculation date" will be the pay out date when the employer conditions continued employment until the pay out date or earlier (for example year end if it is an annual bonus) if the employer does not condition payment.
In case you don't have the link to the manual handy, this is it:
Here is another DLSE link which directly addresses this issue: (smaller file than the manual)
Expert:  Marsha411JD replied 2 years ago.
Hello again,
I wanted to touch base with you and make sure that you did not have any follow up questions for me from the answer I provided to you on the 10th. For some unknown reason, the Experts are not always getting replies or ratings (in the pop up box, which is how we get credit (paid) for our work) that the customer thinks have gone through. In your case I received neither. If you are having technical difficulties with reading, replying or rating, please let me know so that I can inform the Site administrator.
In any event, it was a pleasure assisting you and I would be glad to attempt to assist you further on this issue, or a new legal issue, if needed. You can bookmark my page at:
Thank you.

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