California law provides for significant and important protection to employees in these types of situation. California Labor Code section 203 states that an employer has to pay all wages earned in full and cannot require signing of a waiver as a condition of paying those wages. Singh v. Southland Stone, U.S.A., Inc. (2010) 186 Cal.App.4th 338, 365. This effectively means that when you sign any type of severance release, you are not waiving your claim to any earned and unpaid wages, and you can bring a claim for unpaid wages, earned commissions and bonuses to which you believe you are entitled to in even after you sign that severance agreement. Of course, this only applies to earned, performance based extra wages and not to discretionary bonuses.
As an employee who is about to be laid off or terminated, you may find yourself in the following dilemma: an employer offers you a certain amount of severance in exchange for your signing a severance agreement and release of all claims. At the same time, you believe you are owed earned bonus or commissions that are to be paid at a future date. The employer disputes your entitlement to those additional wages, and at the same time pressures you into signing the severance agreement sooner than later, if you want to receive that severance. The question is - if you accept severance and sign the severance agreement, can you still bring a claim for unpaid bonus or commissions, if you choose to do so?
California law provides for significant and important protection to employees in these types of situation. California Labor Code section 203 states that an employer has to pay all wages earned in full and cannot require signing of a waiver as a condition of paying those wages. Singh v. Southland Stone, U.S.A., Inc. (2010) 186 Cal.App.4th 338, 365. This effectively means that when you sign any type of severance release, you are not waiving your claim to any earned and unpaid wages, and you can bring a claim for unpaid wages, earned commissions and bonuses to which you believe you are entitled to in even after you sign that severance agreement. Of course, this only applies to earned, performance based extra wages and not to discretionary bonuses. Comments are closed.
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