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Signing Bonus Agreement Questions

A signing bonus, also called a sign-on bonus, is an incentive pay offered by an employer to encourage a new employee to join the employer’s workforce. Many employers offer signing bonuses as a way to enhance company compensation packages. Although a sign on bonus is an attractive incentive, it can become a legal issue if an employee is unaware of what to look for when signing a signing bonus agreement with an employer. Employment Lawyers on JustAnswer can answer any questions that you may have regarding sign on bonuses. Below are five of the top bonus related questions answered by the Experts.

Is an employee required to repay a sign on bonus in this situation?

Case Details: There were two signed agreements. The first one says sign on bonus will be repaid upon the employee leaving the company, the second and most recent agreement states nothing about repaying the sign on bonus.

If the employee is still working with the employer and a second contract is put into place, the original contract will still be a valid contract, especially if there was no change in bonus status. The first signing will most likely carry through the second contract. In other words, you could be held to the first contract agreement that states that the employee is required to repay the sign on bonus in the event of leaving the company. Just because there is no mention of the sign on bonus in the second contract, you would be legally bound by the provisions in the first contract with respect to the sign on bonus clauses.

Is a person required to repay a sigingn bonus if they quit a job?

It would depend upon the agreement that was made between the employer and the employee. Usually, a signing bonus is offered to encourage the further employment of an employee. Therefore, an employer will usually make a bonus offer based on the employee agreeing to remain with the employer for a set period of time. Without a contract which states the employee will be required to repay a signing bonus in the event that they leave the company, the employee usually would not be expected to repay the signing bonus.

Is it legal for an employer to refuse installment payments from an employee who is trying to repay the signing bonus?

Without an agreement that states that you could make installment payments, you would be required to repay the amount in one sum. However, if the agreement only states that you are required to repay the sign on bonus, but doesn’t give a directive as to when you have to pay it back, as long as you continue to make payments, you would be in compliance with the agreement. If you began making payments to repay the sign on bonus, but then stopped sending any money, your employer could take you to court for breach of contract.

Can a company force a person to repay a sign on bonus if the company changes the start date after the contract has been signed?

Case Details: The change of start date makes it impossible for the person to start work

It is possible that the company would be in breach of contract if the contract included a firm start date. You should look closely at the contract and carefully read any language pertaining to repaying the bonus. If you repay the sign on bonus, offer the employer a smaller amount to close the debt. The settlement offer should be in writing and sent by mail to someone within the company who has the authority to accept such an offer. Make sure to send the letter via certified mail, return receipt requested. If the employer accepts, make sure you get the agreement in writing.

Can an employer require an employee to return sign on and Christmas bonuses upon termination if no contract has been signed?

Usually, if a bonus is given to an employee, they are not expected to return it. Bonuses are generally given to employees as gifts from an employer. Normally, once a gift is given, it cannot be deducted based on an employee’s termination. However, if there is a contract that states that the employee has to return all bonus and sign on money, the employee would have to return the money. It would be very hard for an employer to force an employee to return a Christmas bonus, unless there was a written agreement to that effect.

There may come a time when need answers to your Employment Law questions. Would you rely only on the well-meant advice from friends and coworkers when dealing with your work related legal questions? If you want legal experience and insight, you may be in need of professional and Expert opinion. Employment Lawyers on JustAnswer handle a wide range of legal questions regarding bonuses, signing bonuses and other aspects of employment law. The Experts can answer any questions that you have about your company’s bonus plan in an efficient and knowledgeable manner.

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