Were You Denied Your New York Financial Industry Bonus?
The annual bonus is a common incentive across all employment fields. It is so prevalent that employees expect them and often ask about unpaid wage claims if a bonus is not forthcoming one year. In many cases, this is not a valid claim since the bonus is likely an extra payment that neither federal nor state law considers regular salary or wages.
The New York financial industry bonus is different. Often comprising most of an employee’s compensation and paid during the first months of the following year, these bonuses often represent payment for work already performed and may be required by the terms of the employee’s contract with their firm. However, if employment ends before the year concludes, employers often claim they are not required to pay the bonus and leave their unemployed workers scrambling, even though those same workers completed successful transactions before their departure.
In the event of resignation or termination from the financial industry, your employer may still owe you a bonus. For this reason, you need to see an attorney about securing that payment if you have outstanding bonus payment from your former firm, or if you intend to resign before receipt of your annual bonus.
How the Bonus Dispute Begins
As mentioned, financial industry bonuses can easily comprise over one-half of a worker’s salary. Determined by successful transactions during the year, it is not calculated until the conclusion of the year and is normally payable during the early part of the following year.
A dispute may arise when an employee resigns or is terminated before the end of the year. Since they are not employed at the time of calculation, employers may assume they do not owe that employee a bonus. The employer may argue that the bonus is discretionary and not guaranteed in a contract. However, employees see it as unpaid salary that is owed to them. They often have records of completed transactions and even an estimated payment they expected as a bonus.
Bonuses are controlled by the federal Fair Labor Standards Act (FLSA) and state wage laws (in New York, the New York Labor Law). In certain circumstances, bonuses are not considered part of salary or wages but as an “extra” benefit or gift given by employers. When bonuses are awarded in this manner, employers are not obligated to pay them every year, and are under no obligation to award them to employees no longer employed by the company.
However, bonuses may qualify as “wages” in certain circumstances, such as:
- If payment is based on employee productivity and success rather than the employer’s annual profit;
- If payment is guaranteed in an employment contract;
- If payment is not linked to special occasions, g. winter holidays or “Christmas bonuses”;
- If payment is promised and announced in advance.
In the majority of cases, New York financial industry bonuses are awarded under these or similar circumstances. Even if an employee is only present for part of the year, there still may be an obligation to pay a bonus if the employee was successful by the relevant metrics. That could make it likely that a bonus is due, although employees frequently need legal representation to secure those funds.
Want Your Bonus?
New York financial sector employees reasonable rely on their bonuses not only for monetary reasons but as leverage when searching for new employment. A positive career trajectory may be impossible in the event that an employee’s total yearly compensation is lowered due to failure to receive a bonus.
The Law Office of Christopher Q. Davis helps former financial sector employees secure unpaid bonuses and ensure their careers stay on track. Contact us now at (646) 430-7930 for a free appointment to evaluate your case.