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Fired To Avoid Paying Commissions Or Bonuses: Is It Wrongful Termination?
On behalf of The Kaufman Law Firm posted in Los Angeles on Friday, April 13, 2018.

California employment laws make it clear that firing an employee to avoid paying wages constitutes wrongful termination, but what about terminating a worker to avoid paying commissions or bonuses due?

This is a problem that happens way too often, especially in the tech industry and among start-up companies, and many terminated workers in Los Angeles and all across California simply walk away, not knowing that they may be entitled to sue their employer for such conduct.

Is firing to avoid paying bonuses illegal?

Our Los Angeles wrongful termination attorney Matthew A. Kaufman explains that employers in California can attempt to avoid paying bonuses or commissions by firing an employee right before the bonus, commission or other employment benefits would have been due or paid.

Such unlawful practice is more likely to occur if the commissions or bonuses due are significant.

This is a clear violation of California’s employment laws and may entitle the fired worker to file a wrongful termination lawsuit, but only if he/she can present sufficient evidence that avoiding to pay employment benefits was one of the reasons or the primary reason for his or her employment termination.

How to prove that it was wrongful termination?

Our best employment law attorneys in Los Angeles at the Kaufman Law Firm outline what types of arguments and evidence can help build a strong legal case to prove that your firing violated California’s wrongful termination laws:

  1. Before the firing, you were a high performer and your performance reviews were good;
  2. You had not violated the company’s policies or engage in any illegal activities (which could have become the employer’s reasoning to terminate your employment);
  3. You were terminated for a petty reason or no reason at all (even if you were an at-will employee);
  4. The employer did not comply with its disciplinary termination procedures in place;
  5. You are not the first employee who have been fired right before the commissions or bonuses would have been due or paid; and/or
  6. Your employment was terminated right before the commissions or bonuses would have been due or paid.

For California courts, bonuses are the same as wages

Most workers in Los Angeles and all across California do not know that Californian treat courts bonuses and commissions earned by employees as wages in employment law cases. However, discretionary bonuses – a form of variable pay the requirements, timing and announcement of which is not disclosed in advance and used merely as an incentive and reward for employees – may not be treated as wages in California.

But if you are entitled to receive bonuses or commissions, and your employer refuses to pay bonuses or commissions just because you were terminated before the date such employment benefits would have been due or paid (in other words, you were NOT actively employed on a bonus payment date), you may be able to file a wrongful termination lawsuit to recover damages.

Arguments used by employers to defend themselves in such cases

If you have been wrongfully terminated for the purpose of avoiding paying earned bonuses or commissions due, these are the most common defenses that can be mounted by your employer to defend himself/herself against your wrongful termination claim:

  1. Argument that you were an at-fill employee (meaning that your employment could have been terminated for any reason or no reason at all and at any given time). But this defense cannot be mounted if your Los Angeles wrongful termination attorney can prove that you were fired for an illegal reason (at-will employees can be fired for any lawful reason, but not an unlawful reason).
  2. Argument that the company’s bonus or commission structure and procedures are subject to changes at any time. While this may be true, it does not change the fact that an employee is entitled to all bonuses and commissions earned before any changes come into effect.

Contact the Kaufman Law Firm to discuss your particular case today. Let our attorneys find sufficient evidence to prove that your firing amounted to wrongful termination. Call our offices at (818)-305-6457 or (866)-278-2385 or send us an email to get a free consultation.

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