Payment of Bonus upon Termination
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Sorry in advance for the long post.
We have an employee who has resigned effective end of October. This employee is on an incentive bonus plan for new hires - the plan pays out 1/2 the bonus after the hired EE has been here 3 months, and the other 1/2 at 6 months.
With this employee resigning Oct 31, there is the potential that there would have been bonuses to be paid in Nov and Dec assuming the employees he hired are still active. My question is, do we have to pay the resigning employee for these possible future bonuses? The action (hiring the new employees) occured before he resigned, but the terms of the incentive plan haven't been met yet, as it hasn't been 3/6 months.
This is complicated by this section from the IL DOL:
Section 300.500 Earned Bonuses
a) A claim for an earned bonus arises when an employee
performs the requirements for a bonus set forth in a
contract or an agreement between the parties.
b) A former employee shall be entitled to a proportionate
share of a bonus earned by length of service, regardless of
any provision in the contract or agreement conditioning
payment of the bonus upon employment on a particular date,
[COLOR="Red"] when the employment relationship was terminated by mutual
consent of the parties or by an act of the employer through
no fault of the employee.[/COLOR]
Our thinking is that he isn't eligible for the bonuses, because Section b seems to state that the employee is only entitled to the bonus when the relationship was terminated by mutual consent or by the employer (which it isn't). I can see how this would protect employees who have been laid off, position eliminated, etc. If an employee resigns, I don't see why they should receive the future bonuses.
Thoughts?
We have an employee who has resigned effective end of October. This employee is on an incentive bonus plan for new hires - the plan pays out 1/2 the bonus after the hired EE has been here 3 months, and the other 1/2 at 6 months.
With this employee resigning Oct 31, there is the potential that there would have been bonuses to be paid in Nov and Dec assuming the employees he hired are still active. My question is, do we have to pay the resigning employee for these possible future bonuses? The action (hiring the new employees) occured before he resigned, but the terms of the incentive plan haven't been met yet, as it hasn't been 3/6 months.
This is complicated by this section from the IL DOL:
Section 300.500 Earned Bonuses
a) A claim for an earned bonus arises when an employee
performs the requirements for a bonus set forth in a
contract or an agreement between the parties.
b) A former employee shall be entitled to a proportionate
share of a bonus earned by length of service, regardless of
any provision in the contract or agreement conditioning
payment of the bonus upon employment on a particular date,
[COLOR="Red"] when the employment relationship was terminated by mutual
consent of the parties or by an act of the employer through
no fault of the employee.[/COLOR]
Our thinking is that he isn't eligible for the bonuses, because Section b seems to state that the employee is only entitled to the bonus when the relationship was terminated by mutual consent or by the employer (which it isn't). I can see how this would protect employees who have been laid off, position eliminated, etc. If an employee resigns, I don't see why they should receive the future bonuses.
Thoughts?
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