A new Louisiana law, effective August 1, 2024, affects when employers are required to pay commissions, incentive pay, or bonuses upon the separation of an employee’s employment. Specifically, employers may now enact a policy stating that such payments are due at the time of separation only when the the compensation has been earned. That is, payments do not need to be made if proceeds from a sale, for example, are still outstanding.
Commissions, incentive pay, and bonuses are due to an employee when they are earned in accordance with the employer’s written policy that addresses the commission, incentive pay, or bonus. The following policies are lawful:
- 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.
Click here to access the full text of the new law.