Q: Can employer claw back sign-on bonus?
Good afternoon. When I joined my employer, NJ based ADP Inc., I was given a sign-on bonus with the condition that I would have to pay it back if I left the company voluntarily within a year.
I just resigned and my last day with ADP will be 25 days short of completing one year with them. Can ADP claw back the sign-on bonus and how?
A: If you signed an employment contract with your company that stated you would forfeit your sign-on bonus if you resigned within a year, then your employer may choose to pursue you for the sign-on bonus you'd forfeit under the agreement based on a breach of contract theory. However, since you quit just 25 days short of one year of service, you may be able to defend against this claim by arguing your employer has received the substantial benefit of your services, since you performed work for 11+ months of the year.
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