BONUSES AS DOCKED PAY?

James Joyner · Thursday, November 13, 2003 · 3 Comments

Megan McArdle points to what seems a rather odd ruling from a California court:

California employers may not dock the wages of low-level employees (called “non-exempt” employees) for things like shoplifting losses, cash shortages and workers compensation costs. Ralphs Grocery established a company-wide incentive bonus program with payouts based on Ralphs’ net income, with “net income” determined according to GAAP to exclude all costs of doing business, including shoplifting losses, cash shortages and workers compensation costs. When Ralphs awarded bonuses to its lower-level employees based on GAAP net income, the court held that Ralphs illegally docked the wages of its lower-level workers for the impermissible charges.

Hmm. My employer pays me a bonus based on a share of net. I got less this past quarter than in the previous one because we netted less. Is that a pay cut?

FILED UNDER: Economics and Business

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About James Joyner
James Joyner is the publisher of Outside the Beltway and the managing editor of the Atlantic Council. He's a former Army officer, Desert Storm vet, and college professor with a PhD in political science from The University of Alabama. Follow James on Twitter.

Comments

Paul says:

Thursday, November 13, 2003 at 14:17

That’s like the court ruling a few years back.

The courts found that since a company gave Thanksgiving turkeys to employees for a few years they were under de facto contractual obligation to continue.

NUTZ!

Paul

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LittleA says:

Thursday, November 13, 2003 at 15:15

Since this is an incentive plan, I guess the company’s next move will be to…discontinue it altogether!

Or would that be illegal too?

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Director Mitch says:

Thursday, November 13, 2003 at 16:36

Another wack-job ruling making employment in California even more difficult. Why to liberals love jobs but hate the companies that provide them?

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