Can I quit my job without repaying a signing bonus?
April 22, 2023 11:40 AM Subscribe
I started a new job three months ago and it's not what I was hoping for, so I'm planning my exit. They've recently changed the terms of my employment (bonus eligibility) and I'm wondering if that means I can avoid paying back my signing bonus when I leave. More inside.
YANML and I will still likely reach out to one if I decide to attempt going through with this tactic. When I joined my current employer I was paid a lump sum signing bonus and it was stipulated in the signed offer of employment that should I exit the company prior to 1 year I would repay the bonus in full. The offer letter also stipulated that I would be eligible for an annual 10% bonus based on performance. The company just did a round of layoffs and in addition, told those of us who remain that our bonus eligibility is being cut by 50% (including retroactively the quarter we just completed).
My question is: does their changing the terms of my employment by reducing the bonus eligibility laid out in my contract nullify my need to repay the signing bonus?
YANML and I will still likely reach out to one if I decide to attempt going through with this tactic. When I joined my current employer I was paid a lump sum signing bonus and it was stipulated in the signed offer of employment that should I exit the company prior to 1 year I would repay the bonus in full. The offer letter also stipulated that I would be eligible for an annual 10% bonus based on performance. The company just did a round of layoffs and in addition, told those of us who remain that our bonus eligibility is being cut by 50% (including retroactively the quarter we just completed).
My question is: does their changing the terms of my employment by reducing the bonus eligibility laid out in my contract nullify my need to repay the signing bonus?
Response by poster: Per the contract, they may withhold the funds from your final paycheck and if the check is not large enough to cover it you are obligated to repay all funds within 30 days. The company "also may pursue all legal remedies available if you do not repay all funds due within such 30-day period."
It's a good idea to ask around, but I haven't been here long enough to feel close enough to anyone to ask that and feel confident it would stay on the DL.
posted by matt_od at 11:59 AM on April 22, 2023
It's a good idea to ask around, but I haven't been here long enough to feel close enough to anyone to ask that and feel confident it would stay on the DL.
posted by matt_od at 11:59 AM on April 22, 2023
You could just keep it and gamble that they won't be bothered to chase you down for it, but personally, I would figure that a company shitty enough to retroactively move the goalposts for annual bonuses is, in fact, going to be even shittier and demand repayment. And with credit checks being rolled into fucking everything these days, if you refuse to repay and just ignore them, what's that impact going to be on your future? If they decide to try to collect and send you to collections, get that reported as a ding on your credit, is the amount of the signing bonus worth the potential hassle and long-term effects?
posted by xedrik at 12:05 PM on April 22, 2023 [3 favorites]
posted by xedrik at 12:05 PM on April 22, 2023 [3 favorites]
Was your bonus based on your performance or the company's performance, and what does the clause say exactly - and what information do you have about either?
(I don't need an answer because I can't really help you from there, but I would personally read it through really carefully before deciding whether it's worth the time/money to have a lawyer look at it. In contracts I've seen that reference 'performance' usually they can be clawed back on that basis.)
posted by warriorqueen at 12:18 PM on April 22, 2023 [1 favorite]
(I don't need an answer because I can't really help you from there, but I would personally read it through really carefully before deciding whether it's worth the time/money to have a lawyer look at it. In contracts I've seen that reference 'performance' usually they can be clawed back on that basis.)
posted by warriorqueen at 12:18 PM on April 22, 2023 [1 favorite]
It's not an annual 10% bonus, but an annual 10% bonus based on performance.
I guess they decided that the performance wasn't there.
Warriorqueen beat me to it.lol
posted by yyz at 12:20 PM on April 22, 2023
I guess they decided that the performance wasn't there.
Warriorqueen beat me to it.lol
posted by yyz at 12:20 PM on April 22, 2023
Mod note: Several comments removed. OP, Ask Metafilter is for concrete questions and answers instead of conversational back and forths. Please refrain from repeatedly responding to comments, thanks.
posted by Brandon Blatcher (staff) at 12:53 PM on April 22, 2023
posted by Brandon Blatcher (staff) at 12:53 PM on April 22, 2023
Your offer letter doesn't matter nearly as much as what's in your employment contract, which I assume you signed. There's very likely language that allows them to change the conditions of employment unilaterally. Ultimately, this is a matter of contract law and employment law and not a matter of what you perceive to be fair, so talking to a lawyer is going to be your best bet here, I suspect.
posted by Aleyn at 1:04 PM on April 22, 2023 [5 favorites]
posted by Aleyn at 1:04 PM on April 22, 2023 [5 favorites]
The offer letter also stipulated that I would be eligible for an annual 10% bonus based on performance.
I would be very surprised if an offer letter specifically said that you would be eligible for a 10% bonus. I am much more used to seeing conditional wording, given that bonuses are used by businesses to allow for variable compensation. My employment letter, for instance, at my current company, includes the following language: "You may be eligible to receive a discretionary bonus of up to a target of XY% of your Base Eligible Earnings as defined in the Company's bonus plan." Note that there are two conditions there - "may be eligible" and "discretionary".
Sometimes corporate executive folks get guaranteed bonuses - but those folks usually have a contract and are not employed at will.
On the very off chance that your offer letter does not have any conditions and you have an employment contract specifically guaranteeing that bonus, then talking to a lawyer is worth it. Otherwise, your job compensation just changed. At will employment allows for compensation change at any time, so long as the change is in the future (ie, not changing pay for work already done). In that case, talking to a lawyer is a waste of your money, and a waste of your time that could be spent finding a new job.
posted by saeculorum at 2:14 PM on April 22, 2023 [2 favorites]
I would be very surprised if an offer letter specifically said that you would be eligible for a 10% bonus. I am much more used to seeing conditional wording, given that bonuses are used by businesses to allow for variable compensation. My employment letter, for instance, at my current company, includes the following language: "You may be eligible to receive a discretionary bonus of up to a target of XY% of your Base Eligible Earnings as defined in the Company's bonus plan." Note that there are two conditions there - "may be eligible" and "discretionary".
Sometimes corporate executive folks get guaranteed bonuses - but those folks usually have a contract and are not employed at will.
On the very off chance that your offer letter does not have any conditions and you have an employment contract specifically guaranteeing that bonus, then talking to a lawyer is worth it. Otherwise, your job compensation just changed. At will employment allows for compensation change at any time, so long as the change is in the future (ie, not changing pay for work already done). In that case, talking to a lawyer is a waste of your money, and a waste of your time that could be spent finding a new job.
posted by saeculorum at 2:14 PM on April 22, 2023 [2 favorites]
My question is: does their changing the terms of my employment by reducing the bonus eligibility laid out in my contract nullify my need to repay the signing bonus?
Almost certainly not. Don't get stuck on their using the word "bonus" twice -- the money you got upon being hired has nothing to do with potential additional pay based on performance.
posted by Etrigan at 2:25 PM on April 22, 2023 [2 favorites]
Almost certainly not. Don't get stuck on their using the word "bonus" twice -- the money you got upon being hired has nothing to do with potential additional pay based on performance.
posted by Etrigan at 2:25 PM on April 22, 2023 [2 favorites]
Nothing you've said indicates they have changed the terms of your sign-on bonus. So you should absolutely expect to have to pay it back. Like Etrigan says, these are two different kinds of bonuses, only your performance bonus terms were changed.
Some companies don't ask for it at all (though I'd say this is rare). All the companies I've worked for ask three times and if you don't pay anything they just stop asking. But there are definitely companies that will take you to small claims / send you to collections to pay the debt.
posted by magnetsphere at 5:18 PM on April 22, 2023
Some companies don't ask for it at all (though I'd say this is rare). All the companies I've worked for ask three times and if you don't pay anything they just stop asking. But there are definitely companies that will take you to small claims / send you to collections to pay the debt.
posted by magnetsphere at 5:18 PM on April 22, 2023
If layoffs are happening, you can ask your manager if being laid off would affect your hiring bonus. If you want, you can ask if volunteering to be laid off would affect the hiring bonus, but I'm not sure how that would affect any legal issues.
In companies where I've worked, layoffs definitely affect performance bonuses, in a bad way for employees. I've seen sales people not get paid earned commissions and go to court, so I have limited sympathy for employers.
You might want to call your state's dept. of employment to see if you have any rights regarding the hiring bonus in a layoff. They're likely to be accurate, and they're free.
posted by theora55 at 6:39 PM on April 22, 2023 [2 favorites]
In companies where I've worked, layoffs definitely affect performance bonuses, in a bad way for employees. I've seen sales people not get paid earned commissions and go to court, so I have limited sympathy for employers.
You might want to call your state's dept. of employment to see if you have any rights regarding the hiring bonus in a layoff. They're likely to be accurate, and they're free.
posted by theora55 at 6:39 PM on April 22, 2023 [2 favorites]
they can make you pay back the signing bonus
they may choose not to...I've gotten lucky and have, twice, had companies that could have forced me to pay back a signing bonus just...forget. that said, I wouldn't count on that from a company laying people off and cutting bonuses--if you leave, I would plan on having to pay it back.
though if your skills are in demand, this can also be part of your negotiations with other companies: "I want to come but I'd have to pay back a signing bonus, so I will need you to cover that." this worked for me, but it really depends on the job market.
posted by wooh at 7:45 PM on April 22, 2023
they may choose not to...I've gotten lucky and have, twice, had companies that could have forced me to pay back a signing bonus just...forget. that said, I wouldn't count on that from a company laying people off and cutting bonuses--if you leave, I would plan on having to pay it back.
though if your skills are in demand, this can also be part of your negotiations with other companies: "I want to come but I'd have to pay back a signing bonus, so I will need you to cover that." this worked for me, but it really depends on the job market.
posted by wooh at 7:45 PM on April 22, 2023
As far as I am aware, this is governed by your contract and there's no reason why general advice here would help you determine that.
posted by lookoutbelow at 8:05 PM on April 22, 2023 [1 favorite]
posted by lookoutbelow at 8:05 PM on April 22, 2023 [1 favorite]
Best answer: I agree with everyone saying that without seeing the contract, it’s impossible to answer this question. I wanted to add two things: First of all, in talking to a lawyer, please talk to one that specializes in contracts. I am a lawyer, I practice criminal defense and have learned a fair amount of business and HR law in my capacity as general counsel of my firm. I am completely and totally unqualified to answer contract questions - this question needs a specialist that you pay money for. Second, state law will be important here, too. For instance, in Oregon, most signing bonuses are not allowed anymore, and therefore I question whether conditioning repayment would be enforceable. But once again, I don’t know what state you’re in, and even if you were in Oregon, this would just be my starting place in talking to a qualified contracts lawyer, not randomly guessing. Good luck!
posted by Happydaz at 8:27 PM on April 22, 2023 [4 favorites]
posted by Happydaz at 8:27 PM on April 22, 2023 [4 favorites]
Yep, echoing Happydaz.
I am a lawyer but IANYL; I also don’t work in contract law or employment law, nor do I work in your jurisdiction. That means that I, like everyone else on here, am unable to answer your question with any useful level of accuracy.
Please see a lawyer before you make any decisions. And think carefully, because apart from anything else, this is A Very Bad Look if, like I do, you live in a smallish city where professional people talk.
posted by Salamander at 10:05 PM on April 22, 2023 [1 favorite]
I am a lawyer but IANYL; I also don’t work in contract law or employment law, nor do I work in your jurisdiction. That means that I, like everyone else on here, am unable to answer your question with any useful level of accuracy.
Please see a lawyer before you make any decisions. And think carefully, because apart from anything else, this is A Very Bad Look if, like I do, you live in a smallish city where professional people talk.
posted by Salamander at 10:05 PM on April 22, 2023 [1 favorite]
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