HARTFORD, CT

(860) 522-8888

|

MILFORD, CT

(203) 691-6491

|

SPRINGFIELD, MA

(413) 785-1400

|

NORTHAMPTON, MA

(413) 341-3639
Skip to Main Content

Are bonuses wages? – Part III

On November 24, 2008, I posted a report on the case of Ziotas v. Reardon Law Firm which held that a bonus due an employee was considered a wage and enforceable under our wage enforcement laws (C.G.S. Section 31-72), which include the remedies of double damages and attorneys fees.  I reported that it was shaping up to be a banner year for employees.

On December 19, 2008, a fellow blogger from the dark side of employment law reported about the Connecticut Supreme Court case of Weems v. Citigroup, Inc., in which it held that a discretionary bonus was not a wage under that statute.  Attorney Schwartz indicated that employers could “breath a sigh of relief” because of this ruling.

Not so fast, Attorney Schwartz!  Sometimes we have to wait and see how the Superior Court judges are applying these holdings.  On January 15, 2009, Judge Robert Martin of New London had a chance to deal with these two seemingly contradictory rulings, and he chose to apply Ziotas and to read Weems narrowly.  

In the new case of Edwards v. Edwards Wines, LLC, an employee brought a claim for, among other things, unpaid bonus compensation.  She claimed that she was due a bonus because of an agreement that she would be paid a bonus for increasing the winery’s productivity and profitability.  Judge Martin squarely addressed the tension between Ziotas and Weems and chose Ziotas.   He pointed out that in Weems, the Supreme Court held that “bonuses that are awarded solely on a discretionary basis, and are not liked solely to teh ascertainable efforts of the particular employee, are not wages under Section 31-71a(3).”  He refused to strike Edwards claim because she alleged that her bonus was dependent on her efforts to increase productivity and profitability.

This is a good first indication for employees that the Superior Courts will interpret Weems narrowly and apply Ziotas.  This writer agrees and in fact, would have gone further.  How can any money that an employer pays an employee not be a wage?  Will employers invoking Weems pay discretionary bonuses without withholdings?  Will they issue 1099 forms?  Does such a payment turn the employee into an independent contractor?

Weems was wrongly decided.  All bonuses are wages and employers should not be allowed to avoid the enforcement provisions of our laws by saying otherwise.  Our legislature should address this issue by rewriting the definition of wages to overturn Weems.