- April 18, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Frustrating Work Experience: Forced to Pay Back Bonuses
Hello, I had a very frustrating experience at work today. The company I work for is forcing us to pay back 79% of the bonuses they paid us last month.
### Detailed Account of the Situation
The company I worked for was bought by another company in October of 2023. During the acquisition they decided to “grandfather” everyone’s hire dates from the previous company for calculation of benefits such as time off. Even though the acquisition didn’t finalize until mid-October, when I look at my official start date of the new company, it says May 2022. However, they decided not to honor these dates for calculation of bonuses that were already paid out at 100%.
Last month we had our annual reviews in which I was rewarded a significant bonus for meeting my objectives and going above and beyond many of them. I was very excited as I worked very hard and felt that it was a good reward for my hard work.
### The Unpleasant Email
Today during my shift everyone on my team and everyone that belonged to the previous company that was acquired by this new one, received an email stating that bonuses were overpaid because they calculated them wrong. The explanation that was given was that the whole bonus should have been prorated to the amount of time we were actually with the new company last year. So from mid-October to December. They said the math works out to receiving 21% of the bonus rather than the full 100% that we received. The company sent out a document explaining that it must be signed by April 19th that asks us to agree to paying back the 79% of the bonus over the next 3 months. This will be quite the significant drop in my paycheck and will be tough to budget for. My bonus was already spent and I don’t have the money to just pay it back.
### Legal Rights in Question
Do companies have the legal right to force us to pay this bonus back that was already promised and given to us?
Thank you to all those who read this.
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If they *legitimately* made a mistake, then yes: you would have to pay back the money mistakenly given to you. What is your location? Since laws are different everywhere. And it does smell a little bit fishy, there are really two possibilities. Either this is a legitimate mistake. Or somebody found out and wants to unwind the clock. If the former then you would owe the money, if the latter you would not. Out of curiosity, what would happen if everyone refused to give the money back, would they fire everyone?
I’ve negotiated agreements like that on both the buying and selling end. It’s really hard for me to believe that the “grandfathering” you mentioned wasn’t intended to cover calculation of bonuses. Do you know of anyone you work with who has legit access to the sales documents?
Had you seen some sort of documentation beforehand informing you that the bonus would be prorated? If not, this comes across less as “We made a clerical error” and more as “We regret paying you so much.”
I would not sign the letter, I’d immediately start looking for a new job, and I’d contact a labor and employment attorney the second they pay you less than your agreed upon rate if they try to take the money from you without consent.
> The company sent out a document explaining that it must be signed by April 19th that asks us to agree to paying back the 79% of the bonus over the next 3 months.
You should never sign anything without getting something for doing so. The fact that they need you to sign, means they cant do what they would like to do without your permission.
Now, what you’re getting in this case may be continued employment, and you may find that valuable enough to be worth signing. But please do consider that you can never be *forced* to sign an agreement, you should always be getting *something*.
I would look for a new job. If they need the cash back that much and that soon, says to me they are potentially having a cash crunch. I would go to a headhunter now. I am really sorry. You may owe them the money depending upon the state and the wording of your contract.
If they actually made a mistake, they can claw back. However the method of repayment is up for negotiation.
I would recommend ‘pitching’ allocating future bonuses towards that amount due to prevent having to “repay”.
Not a lawyer, but have a question: because they are asking for a signature to authorize repayment of the bonus, doesn’t that suggest that an employee’s agreement is required?
Look if they are doing this they realize that all the workers who get affected are going to be extremely upset, so if they don’t care then they are probably planning to do a RIF later in the year anyways once they feel like the company is adequately transitioned. So I wouldn’t sign it, they’ll probably fire you but that’s probably going to happen soon enough anyways…but if you need the salary / benefits, sign it and start looking asap
Did you get laid off and have to reapply for your position after the acquisition? If not, there is no “grandfathering” You are working for the same company. Their argument of prorating doesn’t make sense.
I agree with others that this is a huge red flag that the new culture is toxic and the best path forward is to quietly look for a new job.