By Evan Lange
It depends on what was promised. Under the Texas Payday Law, a bonus is due according to the terms of the agreement between you and your employer. If a written plan, offer letter or policy promised a bonus based on set criteria and you met them, the employer generally must pay it, and you can file a wage claim with the Texas Workforce Commission within 180 days of when it was due. If the bonus is truly discretionary, or the plan clearly says you must still be employed on the payout date, an employer may be able to withhold it when you leave. A bonus can never be withheld for a discriminatory or retaliatory reason.
December is when Houston employees in energy, finance, healthcare and sales start counting on their annual bonus, and when some of them find out it isn’t coming. Maybe you were laid off in November. Maybe you resigned for a new job in January, a week before payout. Whether you’re owed that money comes down to the words in your bonus plan.
Calling a bonus “discretionary” in a handbook doesn’t always settle it. If the company announced a formula, told you you’d earned it, or paid it the same way every year, the facts matter.
Many bonus plans say you must be employed when the bonus is paid. Under the Texas Payday Law, bonuses are due according to the terms of the agreement, so a clear, written condition like this is often enforced. Look closely at:
Regular final wages have strict deadlines under the Texas Payday Law:
Bonuses and commissions may follow a separate payout schedule if it is clearly defined in the written agreement, but they still must be paid on time under those terms.
For non-exempt employees, a nondiscretionary bonus (for production, attendance or performance targets) generally must be included in the “regular rate” used to calculate overtime. If you worked overtime during the bonus period, you may be owed additional overtime pay. See our overtime guide.
These can support claims for unpaid wages, discrimination or retaliation.
Yes, when it was promised. The Texas Payday Law treats bonuses as wages that are due according to the terms of the agreement between the employee and employer. Truly discretionary bonuses are much harder to recover.
Possibly. If the written bonus plan clearly requires you to be employed on the payout date, the employer may be able to withhold it. If the bonus was earned under set criteria with no such condition, it may be owed.
It depends on the plan. Some plans pay a full or prorated bonus to employees laid off without cause, while others require employment on the payout date. Check the plan and any severance agreement before signing.
A Texas Payday Law wage claim must be filed with the Texas Workforce Commission no later than 180 days after the date the wages were originally due.
Nondiscretionary bonuses generally must be included in a non-exempt employee’s regular rate when calculating overtime, which can mean additional overtime is owed.
The Lange Firm represents employees in Houston and across Texas. Attorney Evan Lange can review your bonus plan, offer letter or severance agreement and tell you whether the money is owed, or whether withholding it was a form of wrongful termination or retaliation.
You earned it under the rules they wrote.
Make them follow those rules.
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