Provided by: Judge Ruth B. Kraft




Dear Judge Ruth:

I am beginning to think about my seasonal bonuses. Isn’t a bonus supposed to be for outstanding work? I have an employee who isn’t cutting it and I am not only debating whether she should receive a bonus but also if this is a good time to just let her go. Dr F

Dear Dr. F:

This is a common question as, around the holidays, we take stock of the year which is ending and begin to look ahead in every aspect of our lives. It is also the time of year when gaps in your employment policies become glaring…..so, as you take stock, ask yourself the following:

1. Do you have a comprehensive employee handbook? If so, it should contain language about whether bonuses are discretionary or performance based.
2. What is your timetable for performance reviews? Have you reviewed ALL of your employees this year, whether on their anniversary date, completion of a probationary period, quarterly, or semi-annually?
3. How do you calculate bonuses? Do you use one amount across the board or variations? If the latter, can you substantiate the basis for those variations?

What I am getting at here is that, while there is generally no legal entitlement to bonuses, except as stipulated in an employment contract or your manual, if you provide for a percentage of generated revenue, you should be able to support the basis and amount of this additional compensation. Otherwise, you face the risk of a discrimination filing with state agencies as well as the risk of litigation.

In terms of discharging an employee during the holidays, barring gross misconduct, I honestly do not recommend that you do so. The effect on general morale will be extremely negative and you can expect decreased productivity from your staff. Additionally, when workers feel “ambushed” (and she will feel this way when a pink slip, rather than holiday cheer, comes her way), they are more likely to vent their anger in ways that would be adverse to your interests, particularly by seeking legal counsel, using social media to “diss” you, destroying material records, etc. Unless all of your employment and business practices are in perfect order, you could have exposure.

However, this is a great time to conduct year-end evaluations of past performance, which should be in writing and include performance improvement plans. Couch any negative comments with future expectations. Beginning in the new year, any violations of your policies or poor performance matters should be addressed in constructive action/disciplinary reports which will take the first steps toward a discharge.



Have a question or comment?
Contact Jennifer at Jennifer@Kirschenbaumesq.com or at (516) 747-6700 x. 302.