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Oral promise of extra pay is as binding as contract

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in Employment Law,Human Resources

In Georgia, employers that promise to pay a bonus, commission or other extra compensation to employees had better be prepared to follow through. Even though those promises aren’t in writing, employees may be likely to hold you to any supervisor’s spoken promises.

Recent case: Chandler Byrd claimed that when Walker Electric hired him, a company official agreed to pay him an hourly rate, plus an extra $40 per day. After working almost a year, Byrd was paid the agreed-upon hourly wage but never received the additional money.

Byrd sued, and the Georgia Court of Appeals sided with him, saying his oral contract was valid. (Walker Electric v. Byrd, No. A06A0921, Georgia Court of Appeals, 2006)

Final tip: Don’t confuse an oral contract on wages with an employment contract. As this court carefully pointed out, a wage agreement doesn’t change an employee’s at-will status. It simply ruled that Byrd was due the agreed-upon amount until his at-will status ended (by resignation or discharge). But either party was still free to end the relationship at any time.  

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