Is it legal in North Carolina to withhold bonuses not paid at the time of termination?

by on
in Human Resources

Q. May we include a provision in our bonus plan for North Carolina employees that they will forfeit any bonus that has not been paid at the time of termination?

A. Yes, as long as the provision is in writing. The North Carolina Wage and Hour Act expressly provides that wages based on bonuses, commissions or other forms of calculation may not be forfeited unless the employee has been notified in writing of any policy that results in forfeiture.

Here is a simple example of such a written policy:

On March 1 of each year, each sales associate is eligible to receive a bonus of 1% of all sales made by that associate during the preceding calendar year (the “bonus year”). A sales associate must still be employed by the Company as a full-time employee on March 1 following any bonus year to receive a bonus. If a sales associate is no longer employed by the Company as a full-time employee on March 1 following a bonus year, the bonus is forfeited.

Related Articles...

    No matches

Leave a Comment