Louisiana has enacted legislation that addresses final pay rules when an employee’s compensation includes commission, incentive pay, or a bonus. The changes are a result of enactment of House Bill 352 and take effect Aug. 1, 2024.
The details
By way of background, Louisiana requires employers to provide a departing employee’s final pay by the next regular payday, or within 15 days of the employee’s discharge or resignation, whichever occurs first.
Effective Aug. 1, 2024, House Bill 352 makes clear that compensation available in the form of commission, incentive pay, or bonus must be considered an amount due by the deadline only if, at the time of separation, the compensation has been earned and not modified in accordance with a written policy addressing the commission, incentive pay, or bonus.
House Bill 352 makes clear that the following provisions are lawful:
- A policy providing for adjustments to the amount based on changes to the order generating a commission that affects the amount of the commission.
- A policy providing that a payment to the laborer or employee isn’t earned unless and until the employer has received the payment that generates the commission, incentive pay, or bonus.
In the case of a bonus, if the amount is determined by financial information reflecting the employee's or employer's performance on an annual, quarterly, or other periodic basis, a reasonable amount of time, not to exceed 120 calendar days, is allowed based on standard accounting practices used by the employer to make the determination as to whether a bonus is due and the amount thereof.
Next steps
If you pay employees by commission, incentive pay, or a bonus in Louisiana, review policies and procedures to ensure compliance with House Bill 352.