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Employment Law for Businesses

Bonuses, Incentives & Benefits Advice

Susie Al-Qassab
Susie Al‑Qassab
Partner
Homa Wilson
Homa Wilson
Partner
Neil Emery
Partner

Bonuses and incentives, like commission or share options, are a valuable tool for rewarding performance, motivating your staff and encouraging loyalty. In the modern world, staff are increasingly attracted to companies that offer competitive bonuses and benefits. And they are vital in terms of staff retention too.

But if you’re putting a benefits and bonus scheme in place at your business, you want to make sure it’s done right. That’s where Hodge Jones & Allen can help. We can help you understand different types of bonus schemes, as well as helping you in setting up the right one for your own business.

Types of bonus schemes

There are many different types of schemes including: 

  • Individual/team/company bonuses
  • Discretionary/non-discretionary
  • Cash/shares
  • Sign-on/retention.

The success of any scheme is based on clear rules and an understanding of how it fits with your business objectives. So ensure you’ve got all the knowledge you need to put together a successful bonus and incentives scheme with Hodge Jones & Allen.

"THANK YOU SO MUCH FOR CALMING ME DOWN AND MANY THANKS FOR YOUR UNDERSTANDING."

Why choose Hodge Jones & Allen Solicitors?

Spending time and money on a well-drafted bonus incentive scheme is an investment in the future of your business. It will help you manage the expectations of your staff and avoid any potential disputes. 

At Hodge Jones & Allen Solicitors, we understand that every business is different, so we can help you put together a bonus or incentive scheme which fits with your business objectives. 

We offer advice at competitive hourly rates with flexible fixed-fee options. Plus, our clear and upfront pricing information ensures you remain in control of your costs at every stage.

"THANK YOU SO MUCH FOR ALL YOUR HELP. THANK YOU FOR STAYING SO CALM EXPLAINING EVERYTHING FULLY."

Providing you with assistance

There can be some thorny issues when it comes to bonuses and incentives. For example, whether schemes that claim to be non-discretionary or non-contractual are just that. Your staff may believe they have a contractual right to a payment through custom and practice or because of other commitments made to them outside of any written document.

Even where a bonus scheme is discretionary or contractual, employers should ensure they are not exercising their discretion in an unreasonable way.  

To avoid these issues, our solicitors can help you design, document and operate your scheme effectively.

Help should you need it

We will also support you with any employee disputes or complaints around bonus/incentive payments. These are often pursued in the Employment Tribunal as unlawful deduction from wages claims or breach of contract claims.

Contact our specialist team on
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Featured case

Drafted tailored profit share scheme

We drafted a bespoke commission and profit share scheme for a senior executive taken on by our property company client. We have also assisted a US-based company with an employment contract and essential policies for their first UK-based employee.

"I WOULD LIKE TO THANK BOTH YOURSELF AND ZOE FOR ALL THE HARD WORK YOU HAVE PUT INTO MY CASE. AT ALL TIMES YOU HAVE ALWAYS GIVEN ME SOUND ADVICE."

Frequently asked questions

If an employee leaves before bonuses are paid do they forfeit their bonus?

It depends on what the terms of their contract/bonus scheme state. This is why it is important to ensure that arrangements are accurately documented.

If the business intends not to pay a bonus in these circumstances, this should be clearly stated in the scheme rules or contract. 

When creating the rules/contract, you should always consider and outline:

  • What happens if employees have worked the whole bonus year but leave before the payment date
  • Whether bonuses should be forfeited if employees are under notice prior to the payment date but haven’t actually left.

Their reason for leaving may also be relevant to your decision making. Alternative options would be to specify a pro rata entitlement.

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