What are my rights regarding a verbal bonus agreement?
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What are my rights regarding a verbal bonus agreement?
I was negotiating a salary with my employer 3 years ago. I wanted 70k but my employer could only give me 63k. I declined. After a day, I emailed my employer and suggested they give me 63k salary and a end of year bonus of 7k. This was accepted by my employer in person, in a one-on-one meeting. I was paid my 63k salary and at the end of the year I received a 7k bonus. However this year I received a bonus of 3k. I reminded my employer of our verbal agreement, but they denied there was any agreement. I now do not know where I stand.
Asked on January 3, 2017 under Employment Labor Law, Alaska
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
An oral bonus agreement (that is the correct term; not "verbal") for a bonus is not binding, given employment at will, or the legal doctrine (the law in all 50 states) that the employer may change the terms of employment, including compensation (e.g. salary and bonus) at any time. Only a written bonus agreement for a definite term (e.g. an annual signed bonus agreement) will bind the employer given employment at will. So the employer is free to now reduce, or even deny, the bonus. In the future, make sure all compensation-related agreements are in writing.
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