Quarterly incentive bonus payments must still meet Labor Code Section 204's payday timing

STATE OF CALIFORNIA GEORGE DEUKMEJIAN, Governor

DEPARTMENT OF INDUSTRIAL RELATIONS

DIVISION OF LABOR STANDARDS ENFORCEMENT
525 GOLDEN GATE AVENUE
SAN FRANCISCO. CALIFORNIA 94102

                                                            ADDRESS REPLY TO:
          (415) 557-3827                                      P.O. BOX 603
                                                              San Francisco, CA 94101


                                                            IN REPLY REFER TO:

December 23, 1986

Robert W. Tollen, Esq.
Attorney at Law
Bronson, Bronson & McKinnon
555 California Street
San Francisco, CA 94104

Dear Mr. Tollen:

This is in reply to your letter of November 17, 1986, requesting a review of your client's "Quality Incentive Bonus Plan" and the application of Labor Code Sections 204 and 210 to the plan.

Payment of the bonus on a quarterly basis would not be violative of Sections 204 and 210 provided that the base salary was paid in accordance with those sections. If the policy indicates that the bonus becomes due quarterly, the bonus must be paid within the parameters of Labor Code Section 204. In other words, it must be paid on the next regular payday after it is calculated.

I hope this answers your question; if not, please let me know.

Very truly yours,

Lloyd W. Aubry, Jr.
State Labor Commissioner

LWA:ba

DLSE 905 1986.12.23