Home > Massachusetts Employment Law - General > A New Year’s Reminder: Discretionary, End-Of-Year Bonuses and the Massachusetts Equal Pay Act

A New Year’s Reminder: Discretionary, End-Of-Year Bonuses and the Massachusetts Equal Pay Act

January 8, 2020

MLM Headshot Photo 2019 (M1341570xB1386)By: Matthew Mitchell

The discretionary, end-of-year bonus is the most common form of incentive compensation. When executed well, the discretionary bonus provides employers with the opportunity to reward employee success. However, when executed poorly, even a well-intentioned discretionary bonus may result in significant employment law liability.

The recent passage of the Massachusetts Equal Pay Act, M.G.L. c. 149, §105A (the “Act”), complicates the compliance landscape that applies to discretionary bonuses.  As January bonus season kicks off, employers are well-served to understand the restrictions that the Act imposes on discretionary bonuses.

Review our Employment Team’s recent Employment Law Alert to learn how the Act regulates the type of compensation structures employers may apply to their Massachusetts employees.

For more information, please contact Matthew Mitchell or Amanda Thibodeau.