Louisiana: Commissions and Bonuses Part of Final Pay

/in /by

APPLIES TO

All Employers with Employees in LA

EFFECTIVE

August 1, 2024

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Quick Look

  • Commissions, incentive pay, and bonuses are a part of final wages due if they were earned at the time of separation and were not modified due to a written policy which addressed such payments.

Discussion

Effective August 1, 2024, HB 352 requires commissions, incentive pay, and bonuses to be a part of final wages due if they were earned at the time of separation and were not modified due to a written policy which addressed such payments. The bill also outlines the components of lawful policies which can modify what is due at the time of separation:

 

  • A policy providing for adjustments to the amount based on changes to the order generating a commission which affects the amount of the commission;
  • A policy providing that a payment to the laborer or employee is not earned unless and until the employer has received the payment which generates the commission, incentive pay, or bonus; or
  • In the case of a bonus, the amount of which is determined by financial information reflecting the employee’s or employer’s performance on an annual, quarterly, or other periodic basis, a reasonable amount of time, not to exceed one hundred twenty calendar days from the end of such periodic basis, shall be allowed based on standard accounting practices used by the employer to make the determination as to whether a bonus is due and the amount thereof.

 

Employers who do not have policies in place for the payment of commissions, incentive pay, or bonuses or need to update them may wish to consult with legal counsel to make sure the policies are drafted in accordance with the law’s requirements.

 

Action Items

  1. Review the bill here.
  2. Review and update policies for commissions, incentive pay, or bonuses according to the requirements.
  3. Have appropriate personnel trained on the requirements.

 

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase