Unpaid Bonuses in California: What Was Earned?

What makes a bonus different from a gift?

Identify whether the employer promised payment in return for a result or a period of service, or retained genuine discretion over whether and how much to pay. Written plans, recruiting emails, performance targets and past communications may explain the arrangement.

An unpaid expectation is not always earned compensation. A completed earning condition can also raise questions about a later rule change. Keep the original promise and explain which facts support or cut against satisfaction of the conditions.

Which eligibility terms should you check?

Look at the measurement period, individual and team targets, approval steps, payment date and treatment of resignation or termination. Separate the date a bonus is earned from the date the company normally runs payroll.

For example, a sales-target bonus and a holiday gift can have different legal treatment. This is an illustration of the distinction, not a conclusion about your employer's plan. An attorney can review whether a stated condition is lawful and whether it was applied consistently.

Can a bonus change overtime pay?

For nonexempt work, certain nondiscretionary bonuses must be included in the regular-rate calculation. The calculation can depend on the type of bonus and the period it covers. The bonus itself and an overtime adjustment are separate entries in a pay review.

Do not use the single-rate hourly estimator for a bonus adjustment. Preserve the bonus plan and all hours in the relevant period so an attorney can determine the applicable calculation.

How should you organize the missing payment?

Create a chronology from the first promise through performance, approval and the refusal to pay. Record whether employment continued and whether the employer changed its reason. A demand, agency claim or lawsuit may require different evidence and timing.

Records to prepare

• 01Bonus plan, targets, eligibility and payment-date terms.
• 02Performance results and evidence of completed conditions.
• 03Approval messages, changes to the plan and denial explanations.
• 04Pay stubs, hours and separation documents.

Questions about this topic

Sources and further reading

Use the linked authority for its stated subject. Firm biographies and service descriptions establish what the firm publishes; they are separate from statutes, agency guidance and State Bar licensing records.

• 01Labor Commissioner: wages and bonus definitionsPrimary source for the rules and limits discussed on this page.
• 02Labor Commissioner: overtime rules and exceptionsPrimary source for the rules and limits discussed on this page.
• 03Labor Commissioner: paydays and final payPrimary source for the rules and limits discussed on this page.

Related guidance and next steps