Can an employer put an expiration date on your bonus?

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Can an employer put an expiration date on your bonus?

I work in California. My company pays out quarterly bonuses in the form of gift
vouchers to stay at hotels in our collection. Can they legally place an expiration
date of 120 days on these vouchers since it is an earned/non discretionary
bonus?

Asked on April 18, 2016 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Yes, they can, so long as this was known to employees before they did the work which earned the bonus. No company needs to provide bonuses at all--it is voluntary to do so. Since it is voluntary, the law lets companies put terms and conditions on the bonus. The main limitation regarding earned or non-discretionary bonsus is that the employee must know of the terms or conditions or other limitations before doing the work; otherwise, if the "rules" are changed after the employee did the work and earned the bonus, the company breached the agreement or contract (the bonus agreement, even if oral/unwritten) pursuant to which the employee performed the work. Technically, if the company did this, an employee could sue to get the cash equivalent of the voucher, or an unrestricted voucher; as a practial matter, it may not be worthwhile doing so, however. 


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