I (and several others) are pre-sales engineers for a software company. I am based in Illinois and the others are spread around the country. US HQ is in Bellevue WA and Worldwide HQ is in AUstria. We are not the salespersons, but the technical staff that does demos/presentations/installations etc, as part of the sales process.
Just got our new variable compensation plan and there are aspects that scare us.
We each get a salary (semi-monthly) and quarterly bonuses. Historically, the bonuses were percentage of the total dollar value for the deals you worked on that closed in the quarter. Simple easy to understand.
The new bonus plan has two aspects, both based on group (not individual) performance. Not thrilled about that, but so be it. The key concern is that the plan explicitly states that the company can re-claim prior paid bonuses if the group target is missed for the complete year.
So, if the firm hits the numbers quarters 1, 2 and 3 (and pays bonuses 30 days after the end of the quarter) but tanks bad enough in q4, not only do we get no bonus for q4 (that is fair enough) but we have to repay some or all of the bonus earned and paid in prior quarters!!!!
With a fiscal year ending 4/30, that means repaying income where I have already filed and paid taxes.
Is this legal according to US federal law? My guess is that state law probably controls this issue, but which state? Illinois (my residence and work location), Washington (US corporate office) or????
I will take recommendations on attorneys -- state by state or a single one for all of us, if it is more of a federal issue.
Thanks
orcldba8
Just got our new variable compensation plan and there are aspects that scare us.
We each get a salary (semi-monthly) and quarterly bonuses. Historically, the bonuses were percentage of the total dollar value for the deals you worked on that closed in the quarter. Simple easy to understand.
The new bonus plan has two aspects, both based on group (not individual) performance. Not thrilled about that, but so be it. The key concern is that the plan explicitly states that the company can re-claim prior paid bonuses if the group target is missed for the complete year.
So, if the firm hits the numbers quarters 1, 2 and 3 (and pays bonuses 30 days after the end of the quarter) but tanks bad enough in q4, not only do we get no bonus for q4 (that is fair enough) but we have to repay some or all of the bonus earned and paid in prior quarters!!!!
With a fiscal year ending 4/30, that means repaying income where I have already filed and paid taxes.
Is this legal according to US federal law? My guess is that state law probably controls this issue, but which state? Illinois (my residence and work location), Washington (US corporate office) or????
I will take recommendations on attorneys -- state by state or a single one for all of us, if it is more of a federal issue.
Thanks
orcldba8
