do I have to repay my sign-on bonus?

by Alison Green on June 4, 2013

A reader writes:

I am hoping to tap your wisdom surrounding the repayment of a signon bonus that I owe to my previous employer.

In November, I landed a new job 3 hours from home — which meant relocation. The job seemed like a breath of fresh air. The work environment as well as the description of what they wanted me to be working on were a dream come true for me. I was going to be using some skills that I hadn’t had the opportunity to use in quite some time. After a very brief negotiation over salary, I signed an offer letter and accepted a position. I relocated my family to this new city and put our old house up for sale.

But within a couple of months, the reality of what my new employer *really* wanted me to do started to settle in. They had paid me a $5,000 sign-on bonus with a clawback stating that if I voluntarily terminated employment with the company within 12 months, then the bonus would be recoverable. No terms were ever defined as far as how or when this bonus were to be repaid. Due to this, I decided to NOT go job hunting again, and to stick it out. But as time drew on, I started to get more and more lost in my current role, and it became more apparent that they hired an XX to do the job of a YY (completely different degree). This job was beyond my comprehension, and without additional training, I was not going to be able to perform. I spoke with my managers and requested (begged for) additional training. I even found a 1-week crash course that they could have sent me to that would have at least familiarized me with the domain I was working in. They said they would “look into it.” A number of weeks later, the head office came back and said “find something local.” I looked around, and “local” meant a brand new degree (there was nothing here). I let them know this, and heard nothing back. I pinged them several times about it after this, and it’s like I was calling and emailing a black hole. Meanwhile, my health started to break down again. The stress of being in a job that I knew I could not do, with a family to look after (with a special needs child), and knowing that the more time I spent in this job, the less sharp my (unrelated in this position) skills would become…. you get the idea.

Out of the blue, I was contacted by a company that I had applied to before I had even moved. This company turned out to even be in the same area. I’m an open-minded guy, and the job was really similar to what I was doing before I moved, so I decided to go ahead an interview with them. The interview went *ok*. It was obvious that my skills were getting dull after 6 months of not using them. A couple of days later, I ended up with an offer. We negotiated, and I accepted. I put in my notice at my current company, and they didn’t waste much time letting me know that they wanted the bonus back. I spoke with them at length about the reasons I was leaving, and (more or less) threw myself at their mercy — and asked if they would be willing to prorate it for me based on “time served.” They refused, and said that they were going to take my last paycheck if I didn’t send them a check. I told them they could take it, and to “bill me” for the balance due, as I wasn’t sure what my last check was going to look like.

They took the check, and I owe them ~$3500 now. They haven’t billed me yet (it’s been a couple of weeks now). If they do bill me, I was going to send them a signed letter outlining a repayment schedule I could afford (~$50 per month), and then meticulously pay it back according to this schedule until we are square. Since there were no repayment terms ever outlined, or agreed to in writing or verbally, I’m thinking I should be able to handle it this way and stay out of trouble. However, if they do NOT bill me, should I go ahead and contact them? The last thing I want is to get a letter from some collection agency. By that time, they will have already whacked my credit. However, if they don’t bill me, and I get nothing…? How long should I wait? I’ve spoken to a number of people at length, and half say “wait-n-see”, and the other half say “call them.” I want to call them, but I am torn. Would you reach out to me with some kind of invoice before calling a collection agency, or would you just pass Go and collect $200?

Well, first, they’re unlikely to send it straight to collections without even contacting you. It’s possible, but unlikely. So you probably have some breathing room to see what they plan do. And frankly, they might never go to that step — some companies in this situation will ask for repayment but not take steps to collect it if you don’t comply.

More broadly, though, there’s the question of what you should do. The reality is, this is money that you owe. It was a sign-on bonus that you knew from the start came with certain conditions attached to it, and you agreed to those conditions. A sign-on bonus with a repayment agreement essentially says, “We want you to stay at least a year, and we’re willing to pay you to do that, with the understanding that you’ll forfeit this extra money if you don’t.” And your signing it says, “For this extra cost, I will sell you my commitment to stay for a year, and I’ll refund the money if I change my mind.”

That’s the whole point.

And sure, few people will turn down a sign-on bonus on the off-chance that they won’t end up staying a full year — but plenty do set the money aside long enough to make sure the job will work out, so that they’re not screwed if they want to leave earlier than what they originally agreed to.

This is money that you owe. You agreed to these terms when you took the job, and when you decided to leave, you knew you had signed a repayment agreement. It’s an obligation you incurred, and you should keep your word.

Now, personally, I’m not a fan of signing bonuses that come with repayment clauses. I don’t want an employee sticking around longer than she wants to be there just because she doesn’t want to repay the money. If someone doesn’t want to be there, I want them to go — so bonuses like this encourage the wrong thing.

But you signed and agreed, and you should follow through.

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{ 212 comments }

{ 212 comments… read them below }

  1. Rob Aught*

    No offense to the OP, but the real question is “What’s the right thing to do?” not “Will this go to collections?”

    Think about it if you were in their shoes. Someone made an agreement with you and now they want to back out of it. How would that make you feel? Even if the employer was not upfront with expectations, that wasn’t a condition of the sign-on bonus.

    1. MM*

      Yes, but some places try to force you out, Rob, so that they a. don’t have to lay you off and b. can collect the signing bonus back. I know because the company I worked for did it all the time.

  2. Employment lawyer*

    I don’t entirely agree with AAM, from a moral perspective (this isn’t legal advice.)

    Most troubling is the misinformation aspect. By that, I mean the fact that the “real” job was not the “advertised” job; you said “it became more apparent that they hired an XX to do the job of a YY (completely different degree).”

    How did this happen? If the employer gave you erroneous information, then I’d argue that you have no moral obligation to return the funds: in that situation the “breach” of the agreement is primarily caused by them, and that type of breach isn’t what the refund is supposed to address. That would be true whether or not the employer’s misconduct was intentional. They should bear the results of their own behavior.

    OTOH, if the problem was the result of you either failing to inquire about details, or misreading them (“they say 80 hours a week, but nobody really works that much; they must mean 60;”) or it was primarily a result of stress which was unrelated to any employer… then it’s your problem. That is also true whether you erred intentionally or simply neglected to clarify: you also bear the results of your own behavior.

    1. CoffeeLover*

      I was about to agree with you and then I thought not. Even if he was completely mislead about what the position entails, he was still given EXTRA money to stay a year. It would be different if this wasn’t additional and conditional compensation. At the end of the day, OP shouldn’t have spent that conditional money until he was certain this job would work out. The fact that it wouldn’t should have been clear within a week in his case. It’s the same reason you don’t quit your job after receiving a conditional offer.

      1. Mike C.*

        He was still grossly mislead as to the terms of the employment. Or if I want to push people out with large signing bonuses then I can open up a field office in NV, transfer them and change their job description to prostitute. So they can either do that, or fork over the signing bonus.

        Extreme situation, but there is a point where saying, “but she signed!” just isn’t good enough. That’s what contract lawyers are for.

        1. The IT Manager*

          I doubt she was “grossly mislead as to the terms of the employment.”

          But within a couple of months, the reality of what my new employer *really* wanted me to do started to settle in.

          Sounds a lot like maybe the employer didn’t really understand what degree/expereince they needed. They certainly did not set out to hired the wrong, unqualified woman to screw her over. They obviously want this person to suceed because it helps their business. You are making the company the bad-guy in this scenario. Look at it this way, they spent time and money to hire a person and it mattered enough to them that this person stick around that they included a $5000 incentive for them to stick around for a year.

          1. Josh S*

            “Sounds a lot like maybe the employeremployee didn’t really understand what degree/experience theythe role needed.”

            The entire first couple paragraphs of the OPs letter sounds like he didn’t get the actual duties of the role, vs the description on paper:

            “the description of what they wanted me to be working on” (job description, not questions asked in the interview process)
            “using some skills that I hadn’t had the opportunity to use in quite some time” (not his core strengths)
            “very brief negotiation” (brief negotiation is fine…but it might also entail few questions on the OPs part about the nature of the role…or maybe I’m reading too much into this particular phrase.)
            “they hired an XX to do the job of a YY (completely different degree)”
            “job was beyond my comprehension” (was it because the role changed mid-stream or was it ‘as advertised’)

            I dunno. The whole “deceptive job description” really depends on the situation, and the OP doesn’t give enough detail to say whether he had blinders on going in or whether the company pulled a bait-and-switch.

          2. Mike C.*

            Why do you doubt this? And furthermore doesn’t your reasoning allow me to claw back signing bonuses if my employees aren’t willing to work in my brand new brothel?

            Furthermore, their actions clearly point to the fact that they don’t care if this person succeeds because the OP was never given any form of help or training to be able to do their job. Not every manager or owner is a rational actor!

            1. Anonymous*

              And not every employee is a rational actor. Comparing 2 unknown jobs to that of an unknown job and a brothel employee (which you also don’t give the job of, only the type of business, for all we know in this example you were an accountant at Mike’s Strip-N-Steak and are now being asked to also be an account at Mike’s Strip-N-Stake) is inflammatory and irrelevant.

        2. Wilton Businessman*

          Maybe he was misled, maybe not. The fact that the OP didn’t realize he was in over his head for a couple months indicates at least the jobs were similar. In fact, the OP knew it was going to be a stretch job going in, he just didn’t realize how much of a stretch.

          Things change. If you can’t evolve, we have to find somebody else that can evolve.

          1. Mike C.*

            So you wouldn’t have an issue with my new brothel staffed by people who accepted sign on bonuses from different jobs?

            1. Wilton Businessman*

              Considering that’s not the situation, it doesn’t need to be addressed.

        3. fposte*

          Even in your example, I don’t see why returning the bonus is such a big thing. You earn pay by doing your job and a conditional bonus by meeting the conditions.

          Obviously contracts get involved in this too, but ethically, I think I’m with CoffeeLover.

          1. Mike C.*

            Because I find that the drastic change in job with no training to be an extenuating circumstance that warrants at least the attention of a lawyer. It’s not black and white.

              1. Coco*

                I agree. I don’t feel like we know enough. I seriously doubt that a company would do a complete bait and switch. That would be a waste of their time and money.

                I wonder if part of the OP’s issue is just normal new job discomfort. As to training, the OP never mentioned finding free training, online training, mentors, etc that could make the job more acceptable.

                Even if the OP thought they needed more formal training, the employer may have thought the OP could learn on the job with help from co-workers.

                Maybe this is all a case of a difference in expectations. In any case, I agree with AAM about the sign on bonus.

            2. fposte*

              Never hurts to look at something with a lawyer, but it sounded to me like your argument isn’t that it would be prudent to consult a lawyer but that the bonus should be forfeit. I would agree that it would be prudent to consult a lawyer, but I don’t necessarily agree that the bonus should be forfeit because of a job change. (I’m going to stick to real life examples rather than your Mike’s Chicken Ranch plan :-).)

              1. Mike C.*

                Just remember that the law has to deal with everyone, from reasonable employers to the jackass running a hypothetical “Chicken Ranch”. ;)

                1. fposte*

                  Fortunately, hypothetical court is much cheaper, and permits attendance via internet. Unfortunately, all you collect on its findings are bitcoins, and hypothetical bitcoins at that.

    2. Jamie*

      I see what you’re saying, but I think whether or not there is any moral ambiguity would depend on how different the jobs are and if it was a real bait and switch.

      For example, if I take a bonus to relocate as the Director of IT and that’s what all the paperwork says – but the day I get there the HR Director quits and all of a sudden I’m the Director of HR and that’s what my cards say and I have no IT responsibilities and not even admin rights to my own machine (as if) then ….moral issue. Because as nice as a job as that may be it’s not what I signed on for and now I’m PISSED and if I stay a year I’m hurting my own trajectory because now I not only have stagnant skills but I now have to explain why I left the world of IT to work with people – of all things.

      So in that very specific and clear cut scenario I think the company should waive the payback because they suck and either knowingly or unknowingly screwed me…but if they didn’t? TBH I have a relative who is an attorney and I’d ask them to contact the employer to work out a fair settlement – because I did agree to stay – but I didn’t agree to stay in HR and that’s what happened. If you can be enough of a polite and professional PITA though an attorney they will be smart if they just cut their losses and send a letter forgiving the debt.

      I have no idea what the attorneys fees would be to have that done professionally…by someone not related to you who owes you for IT services rendered.

      1. fposte*

        Just writing a letter would probably be pretty cheap; handling the negotiation, however, is likely to be an hourly rate with retainer unless there’s a family-type “in.”

        1. Jamie*

          Sometimes a letter is enough. Because the company knows what they pay their attorneys and they may find it not worth the cost of fighting it and just let it go.

          The two most useful pieces of paper in the world are a prescription pad and attorney letterhead.

          1. Lyda Rose*

            Jamie, you nailed it! With those two pieces of paper, you can accomplish almost anything.

            1. fposte*

              Lyda Rose, I love the name and the song (and the rose named after it, which is in my garden).

              1. Lyda Rose*

                Yep, my mom is a huge Music Man fan. I must have seen 20 different productions of it. When I was little I thought they were singing just to me!

      2. Joey*

        I agree with your point, but even in that scenario is the op entitled to be judge, jury and award damages?

        1. Jamie*

          She isn’t the deciding factor though – just when you have one side who doesn’t think they should pay and the other side who thinks they should…then unless you actually go to court it really comes down to who wants what more.

          The side that says “f**k it – not worth the aggravation” to the 3,500 is the one that will eat the cost. There’s no judge until there is a judge and without a mutually renegotiated agreement the original stands – and the OP pays.

      3. Vicki*

        I am imagining Jamie as Director of HR (can I work at your new company) hacking into her desktop computer…

        1. Jamie*

          Hacking is such an ugly word…let’s call it micro-local electronic exploration and administration. Which I am firmly opposed to on principle unless you’re me…

          Actually my fictional scenario is kind of cracking me up…me as HR pitting against an Evil IT Director determined to keep me in my place and it’s a race between my total disregard for professional standards and need for access against his security measures.

          There is totally a reality show in there somewhere.

          And Vicki, I filled in for HR for 4 months before and am about to again for a little while, and we would work beautifully together…because I found myself unable to care about anything except accurate payroll and admin stuff and whether work got done…the details of how it got done…that’s what people are paid to figure out on their own.

    3. Joey*

      No offense to you, but morality lessons from a lawyer? Generally, screen names give us credibility, but I think yours is working against you.

      Your rationale is like a crook that gets off because of a technicality. Or someone who screws up royally, gets fired, then sues because all of the I’s weren’t dotted and T’s weren’t crossed.

      The right thing to do is to give back the money because the op didnt hold up his end of the bargain, period. Regardless of everything else he didnt earn the money and therefore isn’t entitled to it.

      1. Ask a Manager* Post author

        Regardless of everything else he didnt earn the money and therefore isn’t entitled to it.

        I think this is the key thing. The money was payment for staying a year. The OP didn’t do that, so didn’t “earn” that payment, and thus it needs to be returned, as the original agreement said.

        It doesn’t matter that the job didn’t turn out to be what she thought it would be; it doesn’t even matter if the company mispresented the job. The bonus was extra, separate money over and above the normal salary as a payment for staying one year — and that’s always what it was, so you don’t spend it if you might not stay a year.

        The OP didn’t stay a year, so the money isn’t hers. Totally separate issue from what we think of this employer.

        1. Employment lawyer*

          But that’s not true.

          The agreement to pay back the $5000 was only part of the entire agreement, and it is made only in the context of the entire agreement. The employer can’t morally enforce that particular clause unless they’re adhering to the rest of the agreement.

          Say that I hire you and give you a $10,000 signing bonus. I tell you that you’ll be working 40 hours/week in a corner office downtown. You have to commit to that job for a year, or you’ll need to repay me. Based on my representations, you believe that you can easily stay a year at that job. You accept.

          Right after you start the job, I move you to a basement office in the slums and start requiring you to work 75 hours/week.

          Now: Can you leave? Morally, of course you can. You don’t have the job you were promised, and you don’t have the job for which you bargained. More to the point, you morally shouldn’t have to pay me back the $10k–after all, the decision to break the bargain was entirely within my control, and there’s nothing preventing me from holding up my end of the bargain.

          An employer who doesn’t deliver as promised has two moral options. First, they can deliver the job that was bargained for. THEN, if the employee leaves they can demand the $5k. Or, they can waive the $5k, knowing that the loss was their own fault.

          1. Jamie*

            Doesn’t that depend on the wording of the agreement, though?

            If the agreement outlined the terms of the office and the hours for the bonus (and I accept, btw :)) then the employer broke the agreement first.

            But if the agreement just stipulated that the OP remain at Evil Lying Enterprises for 12 months – without the conditions – then that’s the agreement.

            And even if it’s the first – you can’t just decide a debt isn’t fair and not pay – the OP would have to go through legal channels to challenge it.

          2. Ask a Manager* Post author

            As Jamie says, it depends entirely on the wording of the agreement. Most of the ones I’ve seen would still require repayment even if the job changed, unless the changes were so extreme that it was essentially a reassignment.

            1. Chinook*

              I think AAM hit the nail on the head with the employer being only in the wrong if it is “essentially a reassignment.” Job change over time and some times over even a short time. Unless your contract was so very specific to outline the duties that the bonus was for, not staying a full year will mean forfeiting the bonus.

              That doesn’t mean it doesn’t suck, though.

            2. Kathryn T.*

              I think that if the job truly does require a different degree, then it’s a reassignment.

          3. fposte*

            Moving out of hypotheticals, in your experience do job contracts, especially those with a comparatively low signing bonus, always get that granular about job conditions?

      2. Sourire*

        “No offense to you, but morality lessons from a lawyer?”

        Really?

        You can absolutely disagree with the poster’s rationale without denigrating an entire profession. People love to make fun of and/or generalize lawyers (or cops, or politicians, etc etc etc) until they need their services. It’s okay though I suppose, because there was “no offense” meant.

        1. Joey*

          Why? Isn’t it relevant to point out that lawyers give advice first and foremost based on the law. I think its pretty accepted that lawyers look for legal tactics to win over making the best moral decision. At least good lawyers do.

          1. Cat*

            Lawyers do a lot of things. In an adversarial proceeding, when actualky arguing becore a tribunal, that is often accurate. In a blog comment, who knows.

          2. Sourire*

            The poster specifically stated they were giving moral advice as opposed to legal advice. You took it upon yourself to decide that apparently the two can never be separated.

            Doctors smoke, cops speed, financial planners may have a penchant for $500 shoes. A profession does not define someone or limit their views outside of that profession.

            1. Joey*

              So its possible to completely and momentarily disregard everything you’ve been taught in your professional career?

              I’m not saying the op can’t be hypocritical every now and then, I’m saying its pretty unlikely that you can totally disregard your professional experience when giving advice.

              1. fposte*

                Wow, that’s pretty offensive. It’s not hypocritical to advise based on the law when you’re professionally obliged to do so and advise based on ethics, religion, or game rules when you’re not operating in a professional context.

              2. Cat*

                As I said, lawyers do a lot of things. I’m sure there are lawyers who don’t advise their clients – privately and confidentially – about aspects of a situation other than the purely legal, but I haven’t met many of them. And I’m sure there are lawyers who don’t do things other than pure adversary procedures (e.g., rulemakings, legislative work, articles, lectures), but I haven’t met many of them either.

              3. Sourire*

                Considering I believe that what is legal is not always moral/ethical and vice versa, yes, it is entirely possible for the two to be separated.

                It’s true, being a lawyer can color your views. So does any other profession. As does one’s religion, upbringing, education, culture, location, age etc. It’s silly, and rather offensive really, to decide one can’t have a moral opinion (or apparently one that has any value) simply because they are a lawyer.

                1. Joey*

                  That’s all I’m saying. Your profession colors your views whether you want it to or not.

                2. Sourire*

                  Colors views, yes. Makes them therefore invalid or subject to ridicule as your original moral lessons from a lawyer quip not so subtly implied, no.

      3. Portia De Belmont*

        Lawyers are neither more or less moral than the rest of the human race. That said, the penalties for a lawyer behaving unethically are harsh, swift, and in many cases, permanent.

    4. Josh S*

      Two things:

      They hired an XX to do a YY position. That’s not particularly unusual–hire a law school degree’d person to do a PR job, hire a history major to do writing, etc. It’s more to do with skills than the degree-on-paper, and how those skills fit with the role.

      That’s an entirely different thing than saying “This role entails doing A, B, and C” when it really entails doing L, M, and N.

      The first is completely on the OP–just because they’re looking for a particular degree of study doesn’t mean they’re providing a position that is what the OP is looking for, even if OP has that degree. The second situation is more bait-and-switch, but that’s DOUBLY why it’s important to figure out what the role is going to be before accepting it.

      In either case, though, there’s no “breach of contract” since there’s no contract as far as the role of the job is concerned–only regarding length of tenure to keep the money.

      Second, the OP has presumably spent this money. Nobody made him spend the money before he served out the year. Nobody made him quit the job for ‘greener pastures’ before the year was up. So there’s a very clear personal advantage that he’s gained by keeping/spending this money while failing to serve 12 months. The moral obligation is clearly on him to repay.

      1. Mike C.*

        Second, the OP has presumably spent this money. Nobody made him spend the money before he served out the year. Nobody made him quit the job for ‘greener pastures’ before the year was up. So there’s a very clear personal advantage that he’s gained by keeping/spending this money while failing to serve 12 months. The moral obligation is clearly on him to repay.

        I’m willing to bet that the money was, spent taking care of the special needs kid. Given that there are laws against not taking care of children under your care, this isn’t really a choice.

        1. Joey*

          And its other people’s fault when you allow yourself to get pissed about something, right?

        2. Ask a Manager* Post author

          Now wait — you can’t sign something agreeing to pay back money if you don’t do X, spend that money on a very worthy cause, and then expect not to pay it back when you indeed don’t do X. The place you spent the money isn’t relevant to your agreement to pay it back (just ask your mortgage company if you can’t pay your mortgage, for instance).

          1. Mike C.*

            I’m (somewhat pedantically) pointing out that the choice to spend the money may not have actually been a “choice” in the normal sense of the word.

            Consider someone who is subject to a court judgement of some kind – back taxes, child support, paying back another sign-on bonus, whatever. It’s not always a choice that the money is spent, and there are times where not spending the money will land you in jail or contempt of court.

            My greater point is that just because money is spent doesn’t mean that it was done in a frivolous or chosen matter.

            2. Anonymous*

              If you are being pedantic then it was a choice. Having a child is a choice. Not paying taxes and therefore owing back taxes is a choice, having children and therefor owing child support is a choice, skipping out on another job is a choice.

              Just because a choice isn’t frivolous doesn’t mean it isn’t chosen.

        3. fposte*

          Olympic-level leap there, Mike–the OP was not, in fact, legally obliged to spend her bonus on her special needs kid, and nor would anybody else be.

          However, if the bonus was required to meet even the barest legal standards of child care, year 2 was going to be a big problem for the OP anyway with the loss of $5k.

        4. Jamie*

          A lot of people have special needs kids without signing bonuses.

          No one is saying she bought candy and lotto tickets with it – heck, I assumed she used it for relocating because moving is expensive and it’s always several grand more than you think it will be.

          But that doesn’t negate a debt incurred. I raised a special needs child and for a time following my divorce money was so tight I could squeeze blood from a nickle – but just because I had other needs for the money didn’t mean the landlord and the utilities weren’t due what I owed them.

        5. Chinook*

          “I’m willing to bet that the money was, spent taking care of the special needs kid. Given that there are laws against not taking care of children under your care, this isn’t really a choice.”

          Does that mean someone with special needs kids get a different set of contract laws but those who are childess don’t? How about marreid couples where both work, so it doesn’t matter what happens to the second income?

          Work is a business transaction and why you need the money is relevant only when you decide whether it is more important to go to work or stay at home and sleep.

    5. OP*

      I’m going to try to answer quite a few of the questions that were asked, and then try to clarify things with a bit more information. The $5,000 was put towards moving expenses, and towards living expenses while we waited for their (rather odd) pay schedule to kick in. What was left over went to pay for the damage deposit, etc for the rental we moved to in the area (Dayton, OH to be precise).

      Yes, the position is exempt. I was hired by a defense contractor as a software engineer, and it turned out that they actually needed a radar engineer (an electrical engineer with a strong background in radar). I “winged it” as best as I could – and felt terrible doing it the entire time. I ended up entrenching myself doing a small subtask that I could handle, but the day was coming to where the customer was going to want that radar engineer to start designing radar systems. It was a really bad situation. Weekly, the lab manager would ask me if I was able to do XXX. I wouldn’t lie. I would say, “I’m working on this right now, as I was told that it’s pretty important.” He would go away for a week, and then come back and ask again. I did not want my company to look bad to the customer (the lab manager in this case), and I felt terrible going in there day after day knowing that I am in over my head, and the day is fast approaching to where I’m going to get called out by the customer – and we all end up losing. I was willing to do it (due to the $5,000 sword that somebody eloquently described) for another 6 months, and then swiftly resume my job search. Would I have been able to hold out in there for that much longer? I don’t know. The customer probably had the suspicion that my company sent in some underqualified boob, and was fishing for me to admit it each week. What would have happened if he just outright called me out? I have no idea. It was such a bad situation. Thankfully I was able to get out and save my company some face in front of the customer.

      When I was in salary negotiations with my current employer, I DID mention wanting a $5,000 signon bonus so I could hand it over and walk away clean, but they would not budge. The job they were offering me was a much much better fit, the insurance was better, the pay was better, etc, etc. Turning them down to remain in this (awkward to say the least) position would have been dumb.

      In the original offer letter (that I still have right here in my hand), does not mention any payback terms – just that it “becomes payable upon voluntary termination of employment within 12 months…”.

      Yes, I do acknowledge that legally I owe this to them. They took my last paycheck (with permission given in an email), and asked me to please send me an invoice for the remainder so we can figure out a payment schedule.

      I still haven’t received anything from them – no phonecalls, no emails, no letters, no singing telegrams, no juggling clowns… nothing. My main concern is that they won’t bother to contact me – but instead immediately turn me in to collections (which would be bad considering I have a security clearance). If the chance of that happening without some kind of contact by the company first is slim, then I guess I will worry a bit less.

      I have no intention on fighting the amount that I owe them. But.. considering everything I went through with them (trying to keep them from looking bad in front of the customer, etc, etc).. forgive me if I am not entirely motivated to call them myself to keep this payback ball rolling. Essentially, if they reach out to me, the money is theirs. By then, I may even have the whole amount saved back up and can just mail them a check.

      Also, for the record, I am a dude (not a lady). ;)

      1. Ask a Manager* Post author

        This is really helpful context to have!

        I think, given this, the ideal thing would have been to go to them and talk about your concerns that your background isn’t what they need and work out a mutually-agreed-upon transition, part of which would include negotiating what to do about the bonus repayment.

        I know it’s too late for that now, but I suspect that would have had a higher chance of getting rid of the repayment. Just leaving makes it a harder sell.

        1. OP*

          I had a long chat with the site director when I put in my notice. I explained everything to him then, but the bonus payback never came up. I really should have mentioned it at that point.. but instead waited for HR to get their termination packet together for me (mentioning the bonus) first. I did explain everything to the HR head (in a different state), and she made a side comment about “How they need to do a better job communicating with their customers about what people they are needing, etc, etc..”. By then, it was already too late to try to negotiate this.

          There are a lot of helpful answers from the folk on here. Thanks to everybody for taking the time to give me all of the great feedback – and thank you Alison for running this!

          1. Ask a Manager* Post author

            Yeah, I think the issue was that you were already putting in your notice when you had that conversation — could potentially have gone differently if you’d gone to them before then (not in the context of resigning, but rather to talk about a mutually-agreed-upon path forward — the problem here was that this ended up being your path forward, one that they weren’t part of deciding on with you).

      2. Rob Aught*

        I admire that you want to pay your debt. That said, if they turn it over to collections I would encourage you to negotiate the collections company down on the amount.

      3. FYI*

        “Becomes payable on X” without more is typically interpreted to mean immediately due in full on the occurrence of the condition. They probably aren’t going to buy your “payment plan” idea, and they’re under no obligation to do so.

        You shouldn’t have spent the money. You did. They may never “come after you”; they may. But rather than jeopardize your livelihood (security clearance), I’d take out a loan and pay them back instead of waiting for the legal/karmic hammer to drop.

        1. OP*

          You are right – I probably should have escrowed the money. Unfortunately, I didn’t have the capital to foot my moving bill completely on my own… so truthfully, it was not an option. Taking a new job in a new city is a huge risk. Part of this particular risk was using that signon bonus to move down here for said new job. It blew up in my face.

          I have learned from this, and pray to God that I don’t have to move my family again anytime soon.

          I think I’ll wait for that hammer for now. If I smell “Collection Agency” in the air, I will call the HR folks and ask them why they haven’t invoiced me yet. Meanwhile, I’m going to stockpile real cash in the background so I don’t have to go into debt to pay this back.

          1. fposte*

            Thanks for weighing in, OP. It sounds like it’s been a tough time, and I hope the new job is a smoother path for you.

          2. FYI*

            I feel you on the move; I’m looking at a cross-country move and am stockpiling cash in advance of the move. Remember that if you are jobhunting in a distant city, having your own funds for interviews/relocation (as posted here on AAM) can improve your chances of getting the job. (And lessen the chances of you needing to use a contingent sign-on bonus for expenses rather than savings!)

            Also, this suggests you need to get a handle on your finances more generally. There are a lot of boards/blogs/etc. out there on meeting savings goals and cutting costs. There are lots of other circumstances where you’d need access to $5,000 on short notice, and it is critical to have access to emergency savings.

            1. k*

              I’m sure your superiority in terms of “things you really should have thought about first” is vastly helpful to this person going through a very difficult situation NOT! Aren’t you just perfect.

  3. Judy*

    Most of the time that we’ve relocated for a job, we have had to sign a paper that if whichever one of us was the “relocator” resigned before the 1 year was up, we had to repay any relocation expenses we received.

    1. Judy*

      It is also somewhat customary, at least within engineering circles, to negotiate with your new employer to remove any roadblocks to your employment.

      Meaning, our company brings some promising young engineers from other countries as Ex-Pat employees. Once they’ve been here for 2 years or so, they at times offer to “localize them”. The company handles the visa/greencard application process and fees. The engineers agree to work for our company for 2 years after the greencard is granted or they will have to return the cost of the fees. I know of at least 2 engineers who moved to another company and received a signing bonus of a size to allow those fees to be paid off.

      1. Chinook*

        “I know of at least 2 engineers who moved to another company and received a signing bonus of a size to allow those fees to be paid off.”

        I was wondering why the OP didn’t do something similair when she jumped ship. If I knew I was going to owe money for quitting early to go to another job, I definitely would have negotiated with new job to cover said expense. I know it was often done at the accounting firm I worked for when the newbies were working towards their CAs and owed a set number of years of service for the study time the company gave them. Their new employers would happily pay the expense to get them on board.

    2. De Minimis*

      We are requesting this right now at my work from an employee who quit after their first week. I think they had extenuating circumstances and are trying to get some kind of hardship exception made, but it doesn’t look like that’s going to happen.

      Although my main thought is why are we paying someone to move nearly 2,000 miles when there are plenty of local or at least in-state people we could hire [it’s a nursing position.]

    3. Kara*

      Yep, my best friend is required to stay at her job two years or pay back the relo money. She and her husband knew they couldn’t afford to do that, so they committed to staying (it’s been 15 months).

  4. the gold digger*

    Which is why I stayed one miserable year plus one day at my job in corporate finance. I had the offer for the new job two months before that. Said if they wanted to pay my relo and signing bonus, I could start sooner. They said nope, they would wait.

    1. Cat*

      From a logistics perspective, did you give notice two weeks before the year or on the day of? I’d be worried that a company would see the opportunity to tell you not to work the notice period and then ask for everything to be paid off (though in that case I certainly wouldn’t see a moral obligation; the legal one might be complicated).

      1. the gold digger*

        I did give it two weeks before – I didn’t even think about that possibility! Thank goodness they weren’t jerks about it. Although it was probably more because there had already been 100% turnover in my group that year and they needed some warm bodies. :)

        It was my boss’ idea that I work the one year + one day. “Just to be sure,” he said. He knew I had the offer as soon as I got it. But then, we both hated working there.

      2. Josh S*

        If you give two weeks and they say that today is your last day, I’d think you’d get the best of both worlds–you can tell future employers that you resigned, but you should definitely not be on the hook for “voluntarily” quitting a job before the year because they ‘fired’ you, and therefore you should be good to keep the sign-on bonus.

        Though I’m sure a good lawyer could argue either part of that either way.

  5. Sarah*

    Keep in mind that with your repayment plan of $50 per month, it will take you more than five years to pay off the amount you owe. I can’t imagine an employer finding than an acceptable solution.

    1. Jamie*

      I was thinking the same thing. Some AR clerk has to do a separate JE every month for the next 70 months for $50.

      I doubt anyone would go to collections before making an in house attempt to resolve this, especially as you’ve told them you’re willing.

      I think the right thing to do if you don’t hear from them is to call their AR and ask how they want to handle it. The company may decide to write it off as too much trouble – or they may expect you to pay. But if they tell you not to pay make sure you get it in writing.

    2. Zahra*

      Another option might be to offer paying the balance when you get your tax returns next year (if you get a sizable amount). I know how hard it is to juggle a budget when you’re stretched thin by payments right and left, but 50$/month really isn’t much.

  6. TRB*

    I agree that $50/month will take forever and they probably will not agree to that, if they ever get back to you. I think you should contact them in a few weeks solely because of the consequences/stress that could happen if you don’t. Because if you never hear from them, you could be worried about this for years and all of a sudden get a bill and not have enough money to care of it at that point.

  7. Sourire*

    I wanted to highlight the part of AAM’s answer about setting the money aside for a bit. The same topic came up a few days ago in the comments from a similar post (my sister got paid extra, can she keep it? – https://www.askamanager.org/2013/05/when-theres-an-error-on-your-paycheck-in-your-favor.html (forgive me, I don’t know how to do the less obstrusive links thing in comments here)). A lot of commenters stated that when they received payroll errors in their favor, they set it aside until all was worked out, which is a very smart idea.

    Any time you get money that you believe may not be yours (or is yours with some kind of built in clause or restriction), it’s wise to set it aside in a very liquid account and not touch it until you absolutely know you’re in the free and clear. At best, you get to keep it and have a nice little windfall, at worst, you will not feel the pressure of having to pay back money you don’t have and you may even get a bit of interest money out of it.

  8. PEBCAK*

    I don’t know what state you are in, but holding your last paycheck probably isn’t legal, even with your permission. They’ve effectively withheld wages for work done. I would therefore expect that they will never bring this up again, and the first lawyer they talk to will tell them to let sleeping dogs lie. Perhaps it would behoove you to start putting that $50/month in a special account in case they do come back and inquire, but I really really don’t think you are going to hear from them again over this.

    P.S. to other readers: If you leave before time is up, and your new company wants you badly enough, you ask THEM to pay it off for you.

    1. Jamie*

      P.S. to other readers: If you leave before time is up, and your new company wants you badly enough, you ask THEM to pay it off for you.

      Yep – it’s called a buy out clause. Also works for vendors who want you to switch mid-contract.

      1. Chinook*

        I think there were even cellphone companies that, when they started up in Canada, offered to buy-out your cellphone contract with the other company. If someone wants you bad enough, they will make sure to give you what you want.

        1. Jamie*

          In the office copier companies will do it, some IT vendors, and phone/data service. It’s really common – because it’s cheaper for them than waiting for the contract to be up and hope to snag you during the short window.

          Once a former co-worker was negotiating a new copier thing and against my normal MO I jumped in when I saw her about to eat the buy out. She not only got the new company to eat the buy out cost but also to ship, at their expense, the old leased copiers back to the old vendor.

          When switching vendors there’s a window where you have a hell of a lot more negotiating room than people realize – I ask for everything within the bound of professional ethics.

          If I was as good at negotiating my own salary as I am at vendor contracts I’d be submitting this comment from a gold plated and silk covered chaise lounge in my luxurious 15K sq foot house with turrets.

      2. Natalie*

        It’s fairly rare because it’s a huge PITA for everyone, but we’ve bought out leases before to accommodate larger tenants.

  9. Ms Enthusiasm*

    I work for a company that sends things like this to collections. I think some are from tuition reimbursement that must be paid back if employee voluntarily leaves within a certain time frame. I’m not sure how long the company waited to hand off to the outside collection agency but I know that agency will hound you non stop (part of my job used to monitor this activity). One good thing is that many people ended up making payments instead of needing to pay the entire amount at once. I’m not sure how this impacted their credit, though.

    1. Ms Enthusiasm*

      One more thing – once it went to the outside collection agency the original company pretty much writes it off. But then you need to deal with the collection agency, and they sometimes get lawyers involved.

      1. Natalie*

        However, an advantage when dealing with a collection agency is that they are bound to follow the Federal Debt Collection Practices Act, which prohibits what they can threaten you with, when they can call you, and various other behaviors. FDCPA only applies to 3rd party debt collectors.

        Lots of collection agencies violate FDCPA, but IMO it’s worth knowing your rights and exercising them as much as you can in this sort of situation.

  10. Mike C.*

    Frankly I find the restrictions of the sign-on bonus to be a complete load of crap given the significant changes in job description, the absolute lack of support and the health problems suffered by the OP.

    And taking the final paycheck? Are you kidding me? No one seems bothered that this reduces the pay of the employee to well below minimum wage?

    Frankly, the OP operated in good faith at all stages of the game, and I find the lack of support from the former employer to be quite disturbing to say the least. If they wanted someone to perform Y, they should have either hired someone who know Y or trained X for the skills of Y, not leave them hanging with a $5000 Sword of Damocles hanging over their head.

    1. Ask a Manager* Post author

      Except the part that wasn’t done in good faith was that the OP (apparently) spent a sign-on bonus — extra money on top of the normal salary — that she knew was only hers if she stayed for a year. In doing that, she was essentially choosing to be in a really tough spot if she ended up wanting to leave. The whole thing could have been avoided if she hadn’t spent that contingent money, which was clearly contingent from the start.

      (Not blaming the OP here — I know it’s tempting to do that. But the reality is that there was clearly a clause attached to that money.)

      1. Mike C.*

        I disagree strongly, the OP did everything possible to meet the terms of that agreement and was prevented from fulfilling it by the very same party that would profit from having the OP not fulfill the contract.

        Not to mention the federal labor violations.

          1. Jamie*

            Which, unless the job description or conditions of employment were in the agreement, is the only thing that legally matters.

            1. Sourire*

              “…is the only thing that legally matters.”

              Am 99% inclined to agree, but because of recently having a colleague deal with an issue with unemployment I am wondering if “good cause” would factor in legally or not. In many states, one can still get UI pay if they quit, if it was for “good cause” such as unsafe working conditions. I don’t think OP’s situation fits the criteria, but I would be interested in the legal aspect of the same situation if they had quit for something that did fall under good cause.

              1. Cat*

                I was going to say this as well. It doesn’t sound like it’s the situation here, but I imagine there would be situations that essentially amounted to constructive discharge.

              2. fposte*

                What matters to UI is not the same was what will matter contractually, though. UI is to keep you from starving–its standards are pretty low.

          3. Mike C.*

            If the OP can’t perform the job, and is receiving no help in performing the job, then all signs would point to finding a new job. But if you have people who need medical care, then you can’t have a gap in coverage.

            So if we take your advice, the OP can only start looking for a job at such a time where starting after the year is over is a reasonable thing to ask for. All the while the OP can’t perform at the current job and thus is risking termination which is great for the sign-on bonus, but bad for having access to specialized medical care. Not to mention the medical effects of extreme stress.

            Or the OP can do what the OP did and find a new job now, alleviate the stress and ensure continued medical coverage of the child.

            The employer could have done any number of things to improve the situation but at every step failed. This isn’t the black and white situation you claim it to be.

            1. Ask a Manager* Post author

              Or she could do what many people do and keep the money separate from her other funds because there’s a contingency attached to it, and you don’t want to spend it until you’ve satisfied the contingency (or know that you could pay it back from other funds if you needed to).

              It doesn’t matter how much the OP may have needed the money, or how much she wanted to leave the job. The money had a very clear restriction attached to it, one that she agreed to up-front.

        2. Wilton Businessman*

          The company is not “profiting” from getting paid back. They already laid out the $$$ and the OP spent it. Not sure where you’re getting confused on this point.

      2. Rindle*

        I wonder whether the OP used the signing bonus to pay relocation expenses. Regardless, it’s a risky move to spend money that has a condition attached to it if you know you can’t afford to pay it back should the condition not work out. I hope OP weighs in to clarify how the actual job was different from the anticipated job. Was it like Jamie’s Director of IT / Director of HR example? Or was it more that OP did not fully understand the position before accepting? I’m leaning toward the latter. It would be weird for a company to pull a major bait and switch deliberately and unapologetically – weird, and not good for either company or employee.

    2. Jamie*

      Exempt personnel are excluded from the min wage laws – and he agreed to it so it’s basically like he signed it over as his initial payment.

      I agree that there was either significant enough miscommunication or bad faith that the employer isn’t blameless…but if you buy a used car and it craps out on you, you can’t just refuse to make payments and pretend you don’t owe the money. If you feel you were cheated or there is a legal reason you shouldn’t have to pay you go to court.

      If the OP feels strongly enough that he was deceived through no fault of his own he should consult an attorney to contest the debt. But if that costs more than the original debt it may not be worth it.

      1. Mike C.*

        Exempt employees are required to be paid a minimum wage per week, and must be paid for any weeks in which they work.

        And yes, I agree that the OP should get a lawyer involved. I’m not suggesting that money not be paid back (it should be held in escrow pending the result of legal action!), I’m objecting to this moral black and white idea that just because a document was signed, that’s that.

        Otherwise the OP’s employer can do all sorts of things and still demand the money back – sexual harassment, criminal intimidation, changing to the job description to include dangerous duties the OP isn’t trained for or objectionable duties (such as my prostitution example above), or just move them all over the country. If they don’t like it, the money must be paid back.

        1. Rob Aught*

          I don’t think anyone is saying extenuating circumstances can’t come into play. Obviously if there was a reason the year could not be worked, especially due to actions from the employer, then there would be no need to repay.

          From what I gathered this is a voluntary separation done more because of a misunderstanding about the job requirements. Furthermore, we can only take the OP’s comments that the misunderstanding is the company’s fault. I tend to believe people are telling the truth until I can prove otherwise, but we are getting one side of the story.

          If the error was done in good faith, in other words the company did not understand or did not communicate what they actually expected for that position, they have not made a moral error.

          Two wrongs don’t make a right. I seriously doubt there is a clause that states “1 year or if I am really really unhappy”.

          1. Rob Aught*

            Started to think about this and re-read the original letter.

            Taking a step back and considering the potential health implications, and having been in a similar situation before, I can relate to how detrimental stress can be.

            That said, I still think part of the agreement was to be with the company for a certain length of time. It would be well worth considering if losing the money was worth the potential health/stress benefits.

            I think the real mistake was asking after the fact. Sure, if you didn’t have a job lined up it may have tipped them off, but it would have been a better course of action. Even “I’m not so sure this is working out. If I were to leave on my own, what would the consequences be.” In fact, that might have been a whole different conversation.

            The company never had the chance to do the right thing. Yes, they made some missteps, but sometimes when a company knows someone is about to leave they can take the issue more seriously. Usually it’s too late to retain someone by that point, but in this case they knew they had at least a 6 month investment and time to turn the situation around.

            I still can’t come up with any excuse for how this was handled. Two wrongs don’t make a right. The company didn’t do right by the employee and the employee broke the terms of the bonus agreement. No one appears to be in the right but that doesn’t nullify the consequences.

        2. fposte*

          Mike, as Jamie notes exempt employees are *not* necessarily required to be paid a minimum wage every week. And it sounds like the OP’s position was in the admin/professional category, which doesn’t require a minimum wage.

          The issue with exempt employees generally isn’t that they’re required to be paid min wage, it’s that inappropriate deductions can make their jobs into non-exempt.

        3. Jamie*

          Exempt employees are required to be paid a minimum wage per week, and must be paid for any weeks in which they work.

          What are you basing this on? They are absolutely required to be paid for the full week in any week in which they worked at all – but they are exempt from minimum wage and OT laws.

          Can you link to the relevant clause on the DOL where minimum wage applies to exempt employees?

      2. fposte*

        FWIW, some exempt employees are exempt from the minimum wage laws but not all–the DOL has a brief overview at http://www.dol.gov/elaws/esa/flsa/screen75.asp.

        However, deductions from final paychecks are *very* strictly controlled even for exempt employees. I don’t know if “she agreed” is going to fly here.

        1. Jamie*

          That was exactly the page on which I was basing my statement.

          I did not, however, take into account fpostes point about the protocol with final checks…so that is very possibly a breach…but not because of violating minimum wage if she’s classified as exempt from Min wage and OT laws per DOL.

          1. fposte*

            Yeah, I’m diving into a lot of interesting labor stuff with this question–it’s amazing how many wrinkles there are!

        2. Ask a Manager* Post author

          Most states do allow deductions from the final paycheck for money owed when the employee has agreed to it in writing. (The rules on the final paycheck differ from the rules on regular paychecks.)

          1. Jamie*

            Like policies that will take present value out of the final check if you don’t return company property upon separation. Every equipment policy I’ve ever written has had that in there and it’s passed muster from three different labor attorneys from three different companies.

          1. fposte*

            …aside from the deductions that are permitted by law. We don’t know the state the OP’s in, but the federal law doesn’t preclude final-check deductions going below this level. It looks like California might (the terms of the permission seem to be stricter, too), but Washington, which is not likely to be an outlier, doesn’t either.

          1. Jamie*

            Ha – it’s a joke between my boss and I that the section below means that every time I replace a hard drive or unjam a candy bar from a desktop printer it means I’m non-exempt…

            If only you could parse out the law that easily…oh the overtime!

            The computer employee exemption does not include employees engaged in the manufacture or repair of computer hardware and related equipment.

    3. fposte*

      I definitely noticed the taking of the last paycheck and was digging around to see what that might do. Aside from the minimum wage issue, it might retroactively get the employee categorized as non-exempt, since this isn’t one of the identified acceptable reasons for final paycheck deductions.

      OP, give the DOL of your state a jingle and see what they think. It won’t get you off the hook for owing the repayment, but there’s no reason why the company should get away with it if it is in fact illegal.

      I’m also wondering if the OP should have been non-exempt in the first place–if the bonus was $5000 and the remainder after the last paycheck is deducted is $3500, that is (assuming the last paycheck is for a full month) a weekly net of roughly $375. It’s possible that she wasn’t actually earning the gross threshold of $455 weekly required to be an exempt employee.

      1. Jamie*

        I’ve been paid weekly and every two weeks – but never monthly. I know some places do that…but if she’s weekly or every other week that’s more then enough to qualify. Although we don’t know if there was accrued vacation or PTO paid out on that check as well.

        A lot of places you start accruing vacation time day one.

        1. fposte*

          Oh, you’re right about the pay interval thing–I didn’t think of that. (And of course vacation days, etc., could factor in.)

          However, if there is a question on this, the OP should definitely at least check her weekly numbers against the threshold and make sure she was on the right side.

  11. Canuck*

    I feel for the OP here. I think this is really one of those situations where, those of us from the outside can easily claim the moral high ground and say “well, of course you should contact them and pay it all back – that’s what you agreed to”.

    But if I was actually in the OP’s situation – I will admit that I would have a hard time paying back the bonus. Maybe the OP used the money to relocate to the new city, or pay off some debt, or help with the care of his/her child – and that money isn’t here anymore.

    It’s easy for us to say “pay it back”, until you are actually in their shoes. So, I’m really on the fence with this one, and if I answered honestly, I would probably not say anything to the company unless they started asking for re-payment. I would hope that they would just drop it, but if they did ask, I would then suggest a re-payment plan as the OP described.

    1. Elizabeth*

      I feel for the OP as well, but I still think she needs to honor the agreement. Imagine that instead of owing money to her former employer, someone owed back rent to her former landlord. The reasons why she hasn’t paid aren’t really relevant – it could be that she spent all her money on shoes, or spent it all on medical treatments. Either way, it wouldn’t change the fact that the landlord is owed money. Hopefully if the reasons were good, the landlord would be sympathetic and work out a payment plan (also assuming that the landlord can afford this), but it wouldn’t be unreasonable for the landlord to expect the money that was contractually agreed upon.

    2. The IT Manager*

      In my opinion, she is morally and legally obligated to pay back the siging bonus. Her financial straights do not change that one bit.

      I’m trying to avoid judging her spending because $50 a month seems very little from a (presumably) professional salary. On the other hand, if that’s all she can afford, then there’s probably no way she could have set that $5000 aside and not spent it for the first year especially when relocating. So to pay it back all back at once is not an option, but she does need to try to work out a re-payment plan that she can afford.

      1. Canuck*

        That’s my point – it’s easy for us to be all high and morally righteous, but I am willing to bet that it would not be that easy for 99% of us to just pay it back.

        For the record, I am in agreement that the OP should pay it back, for the reasons that everyone has stated. I’m just admitting that if it was me in the situation, I would honestly be on the fence about it, and would have a very hard time deciding what to do.

        1. Rob Aught*

          Unfortunately, it is not easy. We had $30,000 in debt and due to job losses and other circumstances could have easily filed bankruptcy. Instead we went into consolidation and paid $750 a month for 5 years and had to do without credit cards the entire time. I was not making big bucks and was the sole provider so that $750 was a real sacrifice.

          I could have said “Oh well, job loss, bad circumstances. Not my fault, I shouldn’t have to pay.” However, I felt a commitment to pay off the debt that I accrued. You can throw in the horrible practices of credit card companies and everything else, but that still didn’t change the fact it was my debt.

          There are a lot of business decisions at both the personal and corporate level that are only feasible if both sides believes the other will keep their word and honor their commitments. When we start looking for an “out” regardless of what we committed to, it just dissolves the trust people have in some of these very vital business deals.

    4. Chinook*

      I have been in the OP’s shoes to. The military, in error, gave us too much money for our final move. A year later, we received a bill for $6,000, due at the end of the month. This was money that we never saw (as most of it went directly to the movers) and the approved budget given to us in good faith by a relocation clerk who had never dealt with someone in DH’s circumstances (we actually could have used more of the money but didn’t need it at the time). But, when there was a national audit of Defence’s programs, it turned out that they gave DH benefits suitable for someone with 20 years of service and not 7. It sucked and we went into debt to pay it off, but it was the right thing to do so we did it.

      1. Jamie*

        My first husband was military and due to a billeting error while moving (it’s always during a transfer) we were overpaid about 3K and I freaked out. I was so afraid of accidentally spending it I opened a separate checking account and checked it every day – because thieves? I don’t know – I was so scared of not having it when they asked for it back. Which they did and it was such a relief to give them a cashier’s check and be done with it.

      2. The IT Manager*

        Amen. Really there doesn’t seem to be a question of morality here. An honorable person pays their debts.

    5. Canuck*

      Obviously I’m in the minority here, so won’t continue to press my point. Just keep in mind, morality and ethics are 100% black and white – until it’s you in that situation. I commend those of you who are able to always do the right thing, because I’m just being honest in that I’m not sure that I always could (depending on the situation).

      1. FYI*

        The fact that many people would be tempted to do the wrong thing doesn’t make the wrong thing aright thing…

  12. Wilton Businessman*

    I have a unique perspective on this having been on both sides of the desk.

    As an employee, I did some training at the company’s expense that was very expensive and included travel. They put a clawback in the agreement that said if I left within 1 year, they get their money back. Fast forward 9 months and a “dream job” (which turned out to be more empty promises than dreams) lured me away. I told the new company that I was in a clawback situation and they gave me a sign-on bonus equal to the amount I had to pay back with an equivalent clawback if I left within a year. After three months I had enough of their empty promises and contacted the original company to see if I could have my old job back. And guess what, I asked for a sign-on bonus equal to what I had to pay back company two. Never cost me a dime.

    Sign on bonuses are vital tools to recruit people from other geographies. Lots of people just can’t lay out up to $10K to move a household and family. I absolutely use sign on bonuses with clawbacks to recruit people. I absolutely require people that receive sign on bonuses to pay back the whole thing if they don’t meet their terms of employment. If their final paycheck doesn’t have enough to cover the difference and they don’t have a check on their last day, I have my attorney send them a note expecting payment within 30 days. I’ve done payment plans over 90 days, but nothing longer. I feel that I have to protect the integrity of the process by getting repayment.

    I believe that you accepted the terms of the agreement and you accepted the additional compensation. Your duties at your employer can change at any time and most agreements will cover this. Your former employer committed to moving you and asked that you commit a year to them. You breached the agreement, you owe them.

    1. Jamie*

      Fast forward 9 months and a “dream job” (which turned out to be more empty promises than dreams)

      Between this and the OP’s letter I hope people will finally understand why there is no possible way to know if something is your “dream job” before you work there. Even if you believe there is such a thing – an ad or an interview cannot possibly give you enough info to make that determination. I really hope we can start seeing this phrase head into retirement when used sans irony.

      1. Wilton Businessman*

        I was young. I thought the consulting lifestyle was romantic. Traveling every week to the same place every week and living in a hotel is far from romantic.

        1. Jamie*

          Ha – I am on occasion and more than once I’ve spent the entire night working in my sub-conscious. Nothing exciting or out of the ordinary – Alex Van Halen wasn’t suddenly the maintenance guy nor did I have a team of monkeys to run cable. Just a normal month end close with typing, checking numbers, sending emails.

          I could have been anywhere doing anything with anybody – and I did a month end close at my desk. Alone. I really need better dreams.

  13. Anonymous*

    The moral dilemma is interesting: I think we’d all agree that there are some circumstances that are so extreme, we wouldn’t expect the OP to pay it back, i.e. harassment, dangerous working conditions, etc. I know you can argue that those things can be addressed in other ways, but regular readers here know that’s not always the case (especially if you work for a small employer).

    So, the rule of “you are morally obligated to return it if you leave early” is not absolute. Instead, we are asked to make a decision on whether the OP’s situation rises to the level where we find it acceptable to do so. I can’t make that call from the facts as shown in the letter; I’d personally want far more information on what XX and YY are, etc.

    Ultimately, it’s a decision only the OP can make, because he/she is the only one with all of the facts on the ground. He/she should be honest about just how bad the job is, and how much it was misrepresented in advance (versus failing to do one’s due diligence), but I don’t think anyone else can come out and say, with certainty, that the OP is morally wrong or right for not repaying the bonus.

    1. fposte*

      I’m not convinced that somebody should get to keep a sign-on bonus even if it was a bait and switch. They get to keep the money they made for the work, but the pay for staying a year is for staying a year, and it’s a bad plan to spend it all assuming that you will indeed stay. In a perfect world, companies would just fork it over at the end of that first work year.

  14. Josh S*

    Can I just point out:

    The work environment as well as the description of what they wanted me to be working on were a dream come true for me.

    This is why you should never call something a “dream job” until you’ve worked there for a while. Something AAM says a million times, but people still don’t grok.

  15. Greg*

    OK, first of all, by the time I got to the end of your letter I was ready to pay off the $5K myself if you would just GET TO THE POINT. I felt like I was reading a transcript of a Shoshanna monologue on “Girls”. Sometimes less is more, ya know?

    Second, I want to echo what others said about how you should have negotiated it with your new employer when you took the job. After all, if you can’t pay your old company back the money, that means you took a job that didn’t allow you to make ends meet. And it’s perfectly reasonable to say, when negotiating an offer, “Accepting this will cost me $5K from my old employer. What can you do to help me out?” Unfortunately, if you already accepted, it’s probably too late (and going back to them now would make you look even worse). So just consider it an expensive lesson for the next time this happens.

    I agree that, based on what you described, your old employer really screwed you. But from a legal perspective, that doesn’t give you much recourse. The contract said you had to pay it back if you left voluntarily, and you clearly did.

    1. Wilton Businessman*

      After all, if you can’t pay your old company back the money, that means you took a job that didn’t allow you to make ends meet.
      Expect the baristas and checkout clerks to start calling you a “fat cat” and other derogatory OWS names.

        1. The IT Manager*

          … but she knew that she owed $5000 when she agreed to the new job before the year is up. That has be factored into a budget to determine if she can afford to take the job.

        2. Greg*

          The point is that the $5K is equivalent to a bill the OP can’t pay off. If you can’t pay your bills, you can’t make ends meet. He absolutely should have factored that into his negotiations with his new employer.

  16. EC*

    I’m curious. Even with the agreement in place, I don’t think the employer can withhold payment for hours worked. If hourly, the employee would at least be due miminum wage. If salaried exempt, then no docking would be allowed for this type of money owed. All the articles/legal guidance I’ve seen would mean that even if the money was owed, the employer’s power to withhold pay for hours worked in order to get it, would still be restricted. Isn’t the employer still forced to go an outside route for property unreturned/money owed? (i.e. bill you separately and/or pursue in court if you refuse to pay? )

    1. Wilton Businessman*

      Rarely are sign-on bonuses allocated for non-exempt workers. I’m not saying it’s not possible, but it’s rare. I think in the case of non-exempt, one has to be a little more careful.

      1. Elizabeth*

        In healthcare, non-exempt, hourly RN’s are about the only positions getting sign-on bonuses these days.

  17. EC*

    federal regs set the salary workweek minimum for exempt employees at $455 a week (except for outside sales). Some states have a higher salary week minimum.

    1. fposte*

      The questions are 1) whether legal deductions from a final paycheck are allowed to take an exempt employee’s pay below that without reclassifying them and 2) whether the OP’s consent was enough to make the deduction in this case legal.

      I’m not immediately finding an answer to either question, but maybe somebody will.

        1. fposte*

          That’s it–going below the minimum is explicitly allowed for paying stuff back. (Unless the OP is in a state with greater protections than Washington, I suppose, but Washington isn’t notably employee unfriendly, so that’s not likely, and you may have picked Washington because you knew something about the OP we don’t :-).)

            1. fposte*

              Sure. What I mean is that if the example was, say, the notoriously employer-friendly Georgia, I’d think the OP’s state might have additional protections. But Washington is likely to be above average, if anything, so it’s unlikely that the OP’s anywhere that gives her more protection (unless she’s in California, because everything should have an asterisk with an “Unless in California” disclaimer).

  18. EC*

    maybe so. I just remember the federal statute restricting when you could dock from salary pay or risk damaging exemption status, regardless of whether the state allowed it, or the employee agreed to it. If a non-exempt position, the employee can’t waive their right to minimum wage/OT, regardless of whether they owe the employer money under a separate agreement. If it had been an advance on pay for work, maybe, but it sounds like the signing bonus was separate. But if the employer’s lawyers’ advised it was a pay advance, maybe that’s why they thought they could hold the last check.

    1. Ask a Manager* Post author

      Yes, but the final paycheck is governed by different laws than regular ones. (I’m also betting the OP is exempt, since signing bonuses are pretty rare for non-exempt positions.)

  19. maybe too nitpicky*

    Maybe this is weird and nitpicky, but I’ve seen some comment referring to the OP as “she”, when in the letter, OP refers to themself as an “open-minded guy“

    2. Jamie*

      I had been saying he and then I saw Alison say she and changed – figuring I was wrong…

      Sorry OP!

  20. CEMgr*

    Has anyone considered whether the OP maybe wasn’t even that poor of a fit for the role? After all, if the OP couldn’t do the role, you’d think the employer would take the steps to improve performance or transition the person out. Yet it appears only the OP was concerned about job performance. Perhaps the OP was overreacting and the company accepted the level of performance that was being offered.

    On a different angle, I have seen incorrect legal advice twice in this thread. First of all, a contract is a 2-sided agreement and breach by one party (e.g. of job conditions, by the employer) can be a completely valid defense to an action based on breach by the other party. In this case, it is quite possible that the employee has a legally valid defense to any repayment, so I would suggest we not advise the OP that this is an inarguable issue.

    Secondly, in many jurisdictions, employers are not allowed to withhold wages to pay even an agreed debt in this manner, and much less so when the debt is arguably not owed. (This is a requirement over and above the requirement to pay at least minimum wage for hours worked in every pay period.) In California, the employer could not withhold any part of the last check even with the employee’s agreement. A California employee could file a claim with the Labor Commissioner and recover major penalties for this kind of employer “self-help” withholding.

    http://www.las-elc.org/getting-your-final-paycheck-when-you-should-be-paid-in-full

    http://www.las-elc.org/deductions-from-pay

    1. fposte*

      I don’t think that’s a correct interpretation. First, the California law is the most restrictive of any in the land, and it doesn’t apply to employees in the other 49 states. Secondly, what you’re linking to doesn’t cover the situation described, wherein an exempt employee agreed to a deduction. Thirdly, the signing bonus contract only includes the job conditions if it includes the job conditions–there’s no reason to assume it did.

  21. Tinker*

    Seems to me that the OP probably doesn’t, in fact, have to pay the money back.

    I’ll pause here for folks to call me a wild-eyed hippie or whatever.

    They don’t have to pay the money back, it’s just possible (probable?) that if they don’t they might be sent to collections. If they’re sent to collections, they’ll have to negotiate with the collector (who may be more willing to settle, considering the nature of their business) and probably take a ding on their credit. If they can’t come to terms with the collector, the collector might sue. If this particular debt is part of an unsustainable burden of debt, the OP might have to declare bankruptcy… but none of these things necessarily mean that the OP has to pay the money back, at least if they don’t have the means to do so (if they do have the means, it’s likely that they can be required to pay — but that doesn’t sound like the problem here) . It just means that there may be consequences to doing that which will have to be managed.

    Ultimately, you can’t get blood from a turnip — although a lot of turnips can be made pretty miserable by the attempt.

    I think sometimes that a good chunk of the trouble that people get into over money have to do with the emotional overhead, not with the facts themselves — I’m owed, I owe, a man pays his debts, they’ll send it to collections, it’ll be on my permanent record, etc. Really, it’s a business matter, and should be treated like a business decision — if I do this, it’ll impact my cash flow in this way or my access to credit in that way, and I’ll deal with this by doing X, Y, Z.

    Probably might have been better to figure this all out before resigning, but considering the effect of a bad job fit I’d guess that it is apt to still be worth it to take the hit and move on and that the OP shouldn’t feel bad about pursuing whichever option is best overall.

    1. Ask a Manager* Post author

      That assumes that you don’t consider “doing what’s right” and “keeping your word” to be elements in this equation, but sure, you could look at it that way. I like to think most of us wouldn’t, because if most of us did, contracts wouldn’t be worth much and the suspicion with which any deal is made would have to go way up.

      1. Tinker*

        Actually, I think that is “keeping your word” in the sense that you’re doing what you agreed to do, namely pay the debt or accept the consequences, and “doing what’s right” in the sense that dispassionately pursuing the best alternative available to them is taking the approach most likely to produce the best solution available to both parties given that what has already taken place can’t be undone.

        The thing I observe here is that as it stands, the OP thinking about the prospect of being sent to collections isn’t getting the company their money, it’s causing the OP to stress over how the working relationship went south and shouldn’t the company do thus-and-such. Well, maybe they should, but they don’t have to and apparently they ain’t gonna.

        On the other hand, saying the OP should pay the money is also not getting the money to the company if the money isn’t there to be had. If the OP did have the money, then their “word” is secondary to the more pressing point of avoiding wrecking one’s credit or potentially being sued — if they don’t, then without the ability to pay their “word” is meaningless.

        Ultimately, the thing that the OP has to do is solve the problem, not necessarily pay the money. The better solutions for solving the problem do involve paying, but failing that there are other survivable, if ugly, solutions.

    2. Natalie*

      “If they’re sent to collections, they’ll have to negotiate with the collector (who may be more willing to settle, considering the nature of their business) and probably take a ding on their credit.”

      One wrinkle to be aware of here – in many circumstances, the amount of debt forgiven has to be declared as income and is taxable.

      1. Tinker*

        Yes, that’s true, and it reminds me that I should have stated that I didn’t give a complete list of what the OP would be facing or would best be advised to do — it’s a complicated question and they need to do their own research, possibly including professional advice.

        It’s not a good situation to be unable to pay one’s debts — paying is by far preferable. But if that option isn’t on the table then one needs to move forward with the cards one has in a sensible and informed fashion.

    3. Lora*

      This is a really great point. Businesses themselves do the calculus of whether an agreement (or law, sadly all too frequently) is worth upholding or breaking when they decide how to run things. Morals and ethics do not enter into that calculation. If breaking an agreement or law will cost the business $2,000,000,000 but will earn them $2,000,000,001 in revenue, that law gets broken, ethics be damned. “Well, people will think badly of them.” Yes, and other people won’t care, and eventually most people have forgotten by the next news cycle.

      People do this individually to some extent, too–not too many folks are interested in the exact contents of the mutual funds in their 401(k)s, but they are certainly interested in the rate of return. Most mutual funds do have a few puppy-kicking, sidewalk-spitting, Nickelback-listening companies in there.

      1. FYI*

        This scenario in a contract is called an “efficient breach”, but when you efficiently breach you still pay what is owed under the contract. It’s just more advantageous to you to break the contract, pay what you owe, and move on to greener pastures. OP did this, but he just didn’t fulfill his (enforceable) obligations under the contract.

    4. Joey*

      This is a pretty ridiculous comment. There’s not much in the world that anyone can “force” us to do.

  22. De Minimis*

    At the job I used to have, signing bonuses were pretty common [and it was the type of system where you had a new “class” of hires each year.] The agreement was, quit prior to six months, pay it all back, quit prior to a year, pay half back. Although technically, they could make you pay it back if they let you go or laid you off, I don’t think many companies in my field did this—they knew they’d get a lot of bad press with future recruits, and were having a hard enough time because they were laying people off with less than one year in and/or adjusting already accepted offers.

    I knew of several who felt stuck there due to signing bonuses, or even worse, student loan repayments that required them to stay 3 years. Was really glad I didn’t have one of those!

  23. Coco*

    Has anyone considered whether the OP maybe wasn’t even that poor of a fit for the role? After all, if the OP couldn’t do the role, you’d think the employer would take the steps to improve performance or transition the person out. Yet it appears only the OP was concerned about job performance. Perhaps the OP was overreacting and the company accepted the level of performance that was being offered.

    THIS. I think this point is getting lost in the discussion.

  24. Darcie*

    I imagine the employer will take more kindly to a repayment plan if you are on top of communication regarding it.

    And now we all know that when you get a signing bonus, you should stick it in a GIC or something until you’re in the safe zone. The OP shouldn’t have spent the money.

  25. rw*

    I liked how a local company handled sign-on bonuses (for critical positions):

    “We’ll pay you an additional X per month to stay on for Y months. If you quit before Y months are up, you forfeit the remainder of the bonus.”

    What was great about it was they tied the Y months to the required experience for the next position up. You were often promoted at the end of the bonus period, and your new pay was more than your previous pay with bonus.

  26. littlemoose*

    This has been a really interesting discussion. I will say that I don’t think the OP’s employer breached the contract with respect to payment of the signing bonus based on the facts he has given us – the positions described don’t seem so radically different that it could constitute a breach of contract on their end. I realize that they certainly require different knowledge and competencies, but ultimately they fulfilled their end of this contract by hiring you and employing you for the specified position, even if the details of this position were poorly communicated, or if (as I suspect) the company simply did not hire very capably for this position (not to insult the OP, but his strengths are clearly elsewhere). Furthermore, it would probably be difficult for the OP to turn around and attempt to disclaim his obligation to repay the debt after he agreed to have his final paycheck withheld to begin satisfying the debt. He essentially acknowledged the existence and validity of his obligation to repay the debt by agreeing to forfeit the final check to partially satisfy it. (While I am a lawyer, this most assuredly is not legal advice – but I know you’re too smart to take legal advice from a random stranger on the Internet.)

    Pragmatically speaking, they may or may not send it to collections. I kind of doubt that would be their first step, but I suppose it could come to that. Whoever has jurisdiction over this in the company may just not have gotten around to it yet, or it may have genuinely slipped through the cracks. You could start socking away money now and offer to pay them what you have, with some payment plan for the balance, once they do come calling. Or, you could be proactive and contact them with what you feel is a reasonable payment plan for both parties (probably more than the $50/mo you have proposed, just because it would take five years to repay, as others have noted). Your last resort could be taking a loan to pay them immediately, and then have fixed payments with the bank. When I read your comment, it indicated that they asked you to send an invoice regarding the remaining unpaid balance; if that’s the case, the ball is in your court, and it becomes more important for you to act relatively soon.

    I wanted to mention one other thing that I haven’t seen in the comments thus far – not repaying the signing bonus will likely burn this bridge, or what is left of it. It’s one thing to leave a job after a short period because it wasn’t the right fit, and when the company didn’t accurately describe the position or hire a person with the necessary qualifications, that’s clearly the case. If you repay the signing bonus (especially if you do so proactively, even via a payment plan), you’re far more likely to maintain your good name there, which is important for future references and employment prospects (though I know you have a new position already). The employer is more likely to think well of you, even if the position didn’t work out. Conversely, if you don’t repay the bonus, it will surely color their opinion of you, and may make it more difficult for you to gain future employment. So it might also help to think of repaying the bonus as investing in your professional reputation for the future.

    All that said, I feel for the OP – relocation is expensive, and the situation sucks. Best wishes on the new position and getting this situation resolved.

    1. OP*

      I typed my comment above right before heading to bed, so my words got a bit dyslexic. I did tell them to go ahead and take my last check, and to invoice me for the rest. I asked them to invoice me, not the other way around (as my comment above stated).

      I think worrying about this is actually worse than going into debt to repay it sooner. After sleeping on everything (what little I got over this), I think I’m just going to bite the bullet and call them this morning & get something set up.

      Thanks again everybody.

  27. CEMgr*

    Now that the OP has explained he was hired with the expectation to write software, when the employer really needed a radar designer, those are two grossly different things. It’s like hiring a nurse to do pediatric nursing when they really want a CPA to handle the transactions of a merger. Both jobs are very technical, and there is no overlap, and there’s just no way a typical CPA can do nursing or a typical nurse audit a balance sheet. Either the employer or the employee made a gross error, and since the employer clearly has far more knowledge and control of the situation, my money is on the error being theirs. Given that, then yes, I believe the employer breached their contract to the extent it may well justify the OP’s breach, and I would approach it that way if I were the OP.

  28. Greg*

    I call shenanigans on everyone saying the OP should have spoken to his old employer about the clawback before giving notice. It’s easy to say in hindsight that might have smoothed things over, and maybe it would have, but it also could have led to the employer using it as an excuse to lay off a disgruntled employee, which would have gotten him out of the $5K obligation but left him in a much worse situation overall.

    1. OP*

      “The next person who says the word shenanigans..” – Super Troopers

      As it turns out, it’s a good thing I called them. They apparently tried emailing me a number of times, but it appears their crappy spam filter kept eating outbound emails to my email address, as I never received a one. They have decided to let me pay back the NET amount (vs the full $5,000 gross) to the tune of ~$2100 after the snarfing of my last check, and are letting me make payments. Granted, they aren’t the silly $50 payments that I can comfortably afford. They want this off their books before the end of the year (can’t really blame them).

      It looks like it’s done and done now. Thanks again to everybody for the advice!

      1. Jamie*

        Good for you for handling this so professionally. Good luck in the new job – the right fit makes all the difference.

  29. CEMgr*

    Good job. Don’t forget to make the income adjustment on your next year’s taxes, too.

  30. Wonderer*

    I can’t believe the OP has the gall to try to send them a few bucks a month (and only if they MAKE him)! Man up, buttercup and pay the FULL SUM of what you owe. I kinda hope they do take you to collections for it. You knew exactly what you were signing and what the agreement was- stop playing stupid.

    1. Michael Jackson*

      It does appear that the situation has already been resolved, and OP is indeed paying the full sum. Did you bother to read all of the comments before keyboard-warrioring things up, or were you simply aiming to troll somebody?

      Is the buttercup similar to the electric slide?

  31. RedStateBlues*

    Honestly, I would have at least had an attorney evaluate the situation. I find it interesting how many people have mentioned OP having a moral obligation to pay it back as if he should be expected to take the moral highground.

    I know two wrongs don’t make a right etc, however, I can pretty safely say if my company had a “moral obligation” to pay, but a legal “out” from doing so, they wouldn’t pay a cent.

    OP, I’m glad it sort of worked out for you.

  32. AB*

    Too late now, but I can’t believe you didn’t think of getting drunk and taking a steaming dump on the boss’s desk as the obvious way out of the situation. Only repayable if you “voluntarily” leave, you say? No problem. See you next week then, boss. ;)

    In all seriousness, simply being crap at the job would be sufficient to guarantee you an involuntary exit under most circumstances. Unless you were working in the Public Sector, in which case it would be a requirement for the job rather than a drawback.

  33. aman goyal*

    Hi,I want to ask – do I have to pay my signing bonus and relocation if separation is involuntary. Actually my company has a policy in which if a person is on bench(talent pool) for 3 month,then after this period he’s notice period will get started. P.S I’m in my probation period. Kindly answer it.
    Thank-you
    Aman

  34. Scott*

    You should have never issued a formal resignation. According to what I read you would lose the bonus if you willfully terminated the agreement. You could of just called in sick everyday for a year and kept your money/got fired.

  35. Rae*

    My husband is in the military. We live on the west coast and I recently started a new job here. I received relocation assistance and a signing bonus from my company (we did not get relocation assistance from the military since this was technically not a permanent duty station – we were just under the impression he would be here training for quite a while and the position would require him to be stationed here ultimately, but it fell through… long story and I’m fully aware this was a big risk moving here in the first place). We just received military orders to move to the east coast for my husband’s new duty station. That being said, I have to leave my new position and my company requires that I pay back the full relocation assistance and my signing bonus if I leave within the first year of my employment here. After 1 year, I have to pay back half of the relocation assistance (none of the signing bonus) if I leave before 2 years is up. Is there any law or act that protects me from this obligation since this is really beyond my control and due to military orders? I know the Servicemembers Civil Relief Act (SCRA) protects us from getting out of our lease with no penalties, so I’m wondering if there is anything similar that protects me in this situation with my job. I threw the idea out there of me teleworking from the east coast, but they don’t seem to be too keen on it. It would really be a shame that I have to stay apart from my husband for 2 years just because I can’t afford to repay my employer. Any info is greatly appreciated!

  36. Mike Roberts*

    Hi,

    I have slight twist on the bonus repayment question. I am in a similar situation in that my offer letter included a bonus that must be paid back in the event I leave within one year. However, my offer letter also said, in the first sentence, that the position that I was offered, which happened to be a new position with the company, reported to the vice president of products. I and 3 others were hired to fulfill the role defined by the new position. After about two months the VP to whom I report approached me, and the others recently hired for the same position, to say that we will no longer report to him but to one of his subordinates. Therefore, the position was essentially moved down one level on the org chart. I and the others who were hired for this position feel that this was a demotion and was not consistent with what our offer letters contained.

    So, essentially, my question is, has the company violated the terms of the offer and therefore making the repayment of the bonus not applicable in the event one us leaves prior to working for one year?

    Thanks,

    1. CEMgr*

      To Mike Roberts:

      Maybe. It depends on the terms of the offer. If push comes to shove, the company will claim that the position itself and its salary are material terms, but reporting structure is just a non-material detail. There is case law in some states that will back them up on this. You’d need to read your contract carefully, and also read your state’s labor code and case law on what constitutes a material breach of an employment contract.

      If you’re positive your employer has committed a breach, then, as this links indicates, your wisest move (assuming you’re deadset on leaving this job one way or another and therefore don’t mind the obvious adversarial nature of this move) is to inform the employer that they have breached the contract and give them a period of time to cure their breach. http://www.nolo.com/legal-encyclopedia/breach-of-contract-notice-of-32649.html

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