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Discretionary vs. Non-Discretionary Bonus

Many people look forward to receiving an anticipated bonus, and plenty depend on this compensation to provide for themselves and their families. This is especially important as the costs of many essential products and services continue to rise. However, when you expect to receive a bonus from your employer and this doesn’t happen, you might feel let down or cheated. In some cases, you might be wondering if there are any legal actions you can take to help you get this compensation. 

Whether or not you can do something about being denied a bonus depends on if your bonus was discretionary or non-discretionary. What is a discretionary vs. non-discretionary bonus? The employment attorneys of Bantle & Levy explain. 

What is the Difference Between a Discretionary and a Non-Discretionary Bonus?

Discretionary and non-discretionary bonuses are two types of bonuses employers may choose to award. However, which type of bonus you receive or don’t receive matters. It’s important to understand what makes a bonus discretionary vs. non-discretionary, as your employer may try to call it something it isn’t. This can make it difficult to understand how the bonus affects you and what your rights are. 

Discretionary Bonuses

One of the biggest differences between discretionary and non-discretionary bonuses is that discretionary bonuses are not something you can expect to receive. Instead, employers award these bonuses at their discretion when they believe employees have earned them. Not only are discretionary bonuses awarded when employees aren’t expecting to receive one, but the amount is also unknown ahead of time. While many of us hope to receive a bonus for exceptional work, there’s no reason for an employee to assume that they’ll get this type of award for their efforts.

Non-Discretionary Bonuses

Employees expect to receive non-discretionary bonuses because these are determined ahead of time by the employer. There may be set goals that when an employee meets these conditions, they are entitled to receive a bonus. While discretionary bonuses are up for employers to decide when they are necessary, employers set the conditions for non-discretionary bonuses ahead of time. Employees can expect to receive these types of bonuses.  

Common non-discretionary bonuses include:

  • Attendance bonuses
  • Sign-on bonuses
  • Referral bonuses 
  • Annual bonuses
  • Safety bonuses
  • Bonuses for a certain quality or quantity of work

Can You Take Legal Action for Being Denied a Bonus?

If you were depending on the income your bonus brings, you likely want to know if there’s any way to fight to get it. While you might think that being denied a bonus means you just need to count your losses, you may be able to fight for a non-discretionary bonus. 

In some cases, a bonus may be promised in an employment contract. If a certain bonus is part of your contract and your employer agrees to these terms, they’re obligated to award it when you’ve met the conditions they’ve set. This includes paying the employee the amount the employer promised, not less. Even if it wasn’t stated in your contract, you might still be able to do something if your employer promised you a bonus if you met their demands and they didn’t follow through. 

As discretionary bonuses aren’t expected, there’s typically nothing you can do about not receiving one when you feel like you deserved it. 

Fight for Your Rights with Bantle & Levy

Bonuses can be a difficult aspect of employment law for employees to understand. However, many people depend on the bonuses they expect to receive. When you met the conditions your employer set for you and were promised a bonus in return that you don’t get, you’re understandably frustrated. The employment lawyers of Bantle & Levy know how difficult it can be to feel like your employer is taking advantage of you and not following through on their end of the deal. If you believe your employer breached your contract or violated your rights, we can help. 

Contact our employment attorneys today for assistance.

Bantle & Levy

Lee Bantle is a partner at Bantle & Levy LLP. He has extensive legal expertise, admitted to the bars of the U.S. District Court and the U.S. Court of Appeals. With a distinguished academic background and clerkship experience, he has been recognized as a top-rated civil rights attorney and esteemed lawyer. In addition to his successful career, he has actively contributed to various legal organizations and serves as a faculty member for NYU's Annual Workshop on Employment Law for Federal Judges.

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