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John, Attorney
Category: California Employment Law
Satisfied Customers: 5687
Experience:  Licensed and practicing attorney.
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If an employee is told they will receive a bonus, can it be

Customer Question

If an employee is told they will receive a bonus, can it be rescinded?
Submitted: 2 years ago.
Category: California Employment Law
Expert:  John replied 2 years ago.
Hi, thanks for submitting your question today. My name is John. I have over 13 years of legal and consulting experience in this area. I’m happy to assist you with your question today.
Yes, unless the bonus was actually agreed to beforehand (i.e., if you reach x hours you get y bonus, then work occurs in exchange for that promise of bonus) it is not in consideration of the employment and is otherwise not wage; and not "owed" as a wage. Rather, a bonus in the truest sense is a gratuity and without contractual commitment, and more importantly no laws require a bonus be paid. Wheras as laws do require wage be paid.
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Customer: replied 2 years ago.
Here is the scenario. We represent Community Associations. Associations commonly hire property management companies to manage the Association. In this instance, that is what the Association did. They hired a property management company to manage the Association. The contract between the property management company and the Association stated that the Association may give the assigned property manager a bonus if they desire to do so. The Association did tell the property manager she would receive an $8,000 bonus, but when a new Board was elected for the Association, the Association unhappy with the property manager rescinded the bonus. This occurred in California. Can the Association do this?
Expert:  John replied 2 years ago.
Yes the Association can do this because the agreement states "may" give a bonus. Even though they verbally told the manager that they would give a bonus, that was a gratuity. A gratuity or gift is not complete until actually given, and is capable of rescission up until the time of conveyance.
Expert:  John replied 2 years ago.
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