Do I Get My Bonus If I Quit?

Maybe

It depends on the terms of your bonus agreement with your employer.  For example, if your bonus agreement with says that you must be employed when bonuses are paid, and you quit before then, you may be out of luck.  However, the answer may be very different depending on whether what you are calling a bonus is truly a “bonus” as opposed to a “commission.” 

What Is the Difference Between a Bonus and a Commission?

A lot – But Most Importantly When They Are Earned

A “bonus” is money paid to an employee when both the decision about whether to make a payment and the sum of the payment are at the employer’s discretion.[1]  If, instead, you have an agreement with your employer providing that if you generate a certain number or volume of sales you will be entitled to a fixed percentage of those sales, this may be deemed a commission to which you are entitled regardless of whether you remain with your employer.

Both bonuses and commissions are, generally, a matter of contract. What your bonus agreement (or commission agreement) says usually controls. So if you are thinking about quitting, timing of your notice is critical.

The Key is Whether Your Commission Can Be Considered “Earned.”

If You “Earned” It, You Keep It. Otherwise, You May Be Out of Luck

A commission is considered earned based on the terms of your agreement.  For example, your agreement may provide that you have “earned” your commission once an agreement is signed with a customer, once goods ship, or once relevant invoices on the sale are paid.  In the absence of a written agreement, the past practices of you and your employer will be the determining factor.  If there is neither an agreement nor past practices to review, the relevant measure is if the employee produced a person ready, willing, and able to enter into a contract.[2] Once you have “earned” a commission or bonus, it is yours.

Still Not Sure?

Call Us!

In most situations, we can review your relevant documents for a flat fee to let you know where you stand. If you would like to discuss your situation with us, please feel free to call or e-mail us at any time. You will be on the phone with an attorney within 24 hours. We offer flat fee rates for review of most bonus or commission agreements.

[1] https://www.labor.ny.gov/legal/counsel/pdf/payment-of-commissions-frequently-asked-questions.pdf

[2] https://www.labor.ny.gov/legal/counsel/pdf/payment-of-commissions-frequently-asked-questions.pdf