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Pay after termination

Q. I didn’t have the best relationship with my boss, but I did well on the job. I earned a bonus before I was terminated and it was not in my last check. I feel I am entitled to that money. Doesn’t my boss have to pay me that bonus?

A. Leaving a job is stressful, and leaving a job with money owed to you can add to that stress. Before you start thinking that your boss is trying to shortchange you, do your research. There are many ways to get paid by an employer - salary, commission, vacation pay, bonus, holiday pay are just a few. Though the dollars may all look alike in your pay check, they may be regulated by state or federal statute, individual contract, or corporate policy regarding if you will get paid and the time frame for that pay.

I see two concerns here. One concern is getting paid, and the second is when that pay should be yours. Some types of compensation are typically due to an employee in the last check. Final pay check laws vary by state, and in general you are entitled to receive owed vacation pay in your “final” paycheck. Other types of compensation might be paid within 30 days, or in the next regularly scheduled pay-day. Some company bonuses are paid similarly to commissions and paid only after the company is paid. Some bonuses are paid only if the person is still on the payroll at the end of the year. Understanding what type of “bonus” you have earned will help you determine what to expect, and what your former employer should expect as well.

Review any written plans you have from your company which provide information about how the bonus is described, and how it is paid out. If you don’t have anything in writing, you can call or email human resources to ask about payroll’s plans to release the money to you, and when they anticipate making that happen. If that option is not available, you may need to contact your manager or a more senior person to determine what the company plans to do. If they plan to pay, and the method follows the same method that was previously used to pay you, all may be good. If not, there are other avenues.

I consulted with David Conforto, managing partner of Conforto Law Group, a boutique Boston law firm specializing in employment law and committed to the representation of employees, who explained that terminology can be tricky. With the term bonus, “If the bonus can be definitely determined (i.e., no discretion on the employer's part) and is due and payable, the Wage Act will apply. An employer who fails to pay earned commissions may face liability under the Massachusetts Wage Act which explicitly defines the term "wages" to equal "commissions" where certain parameters are satisfied. The commission will be deemed "due and payable" where the employer has agreed to make payment by a certain date and "definitely determined" where the employer is required to calculate the commission according to a certain formula.”

Keeping track, in writing, of all agreements for compensation, and all formulas used will make it much easier to get paid when managers change, or when employment changes. Some plans change annually, but others can change as often as quarterly or more. Conforto goes on, “It will be difficult to gain protection under the Wage Act where the commission plan is not in writing or where the plan grants the employer discretion as to when the commission becomes due and how the commission is to be calculated. If the Wage Act does apply, you will be in a strong position to recover the commission owed to you.” If you ultimately prevail, the employer must pay three times the amount of the commission in question, and you can also recover the reasonable attorneys' fees and costs that you were required to pay in litigation. This provides a significant incentive for an employer to avoid litigation and make good on the commission that an employee is owed.

If your former employer does not agree to pay, complaints for unpaid commissions must be filed with the Fair Labor Division of the Massachusetts Office of the Attorney General.

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