What are the laws governing the payment of employee bonuses?

In California, payment of employee bonuses are governed by a variety of state and federal laws. For example, the California Labor Code states that employers must provide bonuses in a timely manner, and that they must be based on objective criteria and issued to all employees in a nondiscriminatory manner. Additionally, the Fair Labor Standards Act (FLSA) prohibits employers from withholding employees’ bonuses without good cause. California also has several laws that specify how and when bonuses must be paid. For example, any bonus that is not earned within a single pay period must be paid out at least two times a year. Additionally, any bonus that is based on performance must be paid within 30 days of when the performance period ends. Furthermore, employers are prohibited from withholding bonuses because of disciplinary action. Similarly, employers are not allowed to impose a “clawback” provision that would allow them to reclaim bonuses from employees if their performance changes or if the company’s financial situation declines. Overall, California employers have to strictly adhere to the laws governing the payment of employee bonuses in order to remain compliant with the law. They must provide employees with bonuses in a timely manner and ensure that bonuses are based on objective criteria and provided to all employees in a nondiscriminatory manner. Additionally, all bonuses must be paid out in accordance with state and federal laws.

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What are the laws governing the payment of employee bonuses?

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