How to collect bonus money after termination from a job

Written by john heller
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Bonus money or incentives given by businesses are tricky things to quantify. Yes, they are earned payment for a job well done, but they are also incentives often offered by a company beyond the contracted compensation most employees receive. Many times on termination the first thing a business or corporation will do is to withhold a bonus check. The employee who earned the bonus feels the company is obligated to pay her for the work she completed, but the company feels it does not need to incentivise an employee who is no longer going to need motivation in the future. Unfortunately, without a binding contract or legal document (or at least a policy statement guaranteeing payment of bonus after a certain date), it is hard to hold a company to a bonus payment after termination. However, with some preparation and insight, it is not impossible to get an employer to pay out, providing the company policy or proof is available.

Skill level:


    The Approach

  1. 1

    The first thing any person looking to receive unpaid compensation needs to remember before he goes about trying to recover lost bonuses is that an ex-employer is NOT a friend. It is a business and is looking out for the bottom line. Do not try to contact an ex-manager or supervisor as she most likely made the decision not to pay in the first place. Instead, contact the business's HR department, if it has one. HR is impartial and is set up to send you paperwork. Request employment contracts, any bonus contracts that were signed, the company's bonus policies and practices and any available termination paperwork. If HR refuses to send the company policy of bonus payment, ask a former co-worker to get it for you. If you are in fear of a lay off or termination, acquire or print out this information as soon as possible and take it home. This will help you to know if the company's policy is to pay a bonus for work after a certain date and will inform a lawyer as to if he has an actionable case.

  2. 2

    What an ex-employee was terminated for is not in dispute. What is in dispute is wages unpaid. Do not get distracted by arguing the validity of termination unless it is directly related to not receiving the bonus after termination. If it is, the company needs to be able to prove this as the termination reason and must have documentation to back up the statement. If the employment was at will, you may have been let go for a reason that is not stated or that is not grounds for termination. If that is the case, unless the bonus contract states the employer can withhold payment for any reason, there is a good chance you can recover the wages.

  3. 3

    The first two steps involve gathering evidence of money that is owed. After collecting as much proof as can be found, it is time to make a formal claim on the owed wages. Type up a formal request for the unpaid wages and fax them to the manager who terminated your employment and the HR representative of that department. Make sure to keep the faxing information and call to confirm delivery. Do not talk to them or demand payment. Simply make sure they received your request. Legal Professional Gary A. Parks advised this course of action and suggested the following wording to make sure the demand was formal:

    This is my formal demand for my unpaid wages from (date and year of unreceived payment) of (amount of money owed). It is my understanding it was due and payable by (date payment was due). I have not yet been paid this bonus. Please send the (amount of money owed) to the address below.

    (Print address by hand) (Signature by hand) (Typed address and signature)

  4. 4

    According to Gary A. Parks, if the company is legally liable to pay the bonus, it must do so in 30 days after receiving the formal request. Do not contact it or negotiate with it in any way unless it wants to send payment in full. If it tries to contact you for any other reason, simply inform it again that full payment was not received. An owed ex-employee must wait 30 days before the case is actionable in court. However, after the 30 calendar days are up, according to Deskin Law Firm, the company is liable to pay a full day's wages for every day the payments are not received up to a full month.

  5. 5

    If no payment has been received after 30 days from the previous employer, it is time to take it to court. There are many good attorneys who specialise in unpaid wages and can be found on the Internet. Explain the situation to them and explain the process that was taken to collect the unpaid wages. Keep all collected information on hand because proof is the best way to win a court case. Many times the lawyer will only get paid if she wins, so having documentation is key.

Tips and warnings

  • Remember that collecting an unpaid bonus is contingent on if you are actually contractually owed or if company policy dictates you will be paid. Many businesses contractually specify that they can withhold bonus payments for any reason and have employees sign contracts to this effect. If the business can produce a signed document to that effect, a person will never collect the unpaid bonus no matter how unfair it seems. Still, it doesn't hurt to try to collect any wages an ex-employee feels are rightly owed to him, and if you follow these steps, you might get the unpaid bonus you rightly deserve.

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