Louisiana Amends LWPA to Address Commissions, Incentive Payment Plans, and Bonuses to Give Greater Flexibility to Employers
Governor Jeff Landry recently signed into law Act No. 556 , which updates the Louisiana Wage Payment Act (LWPA) to address commissions and plans for incentive payments and bonuses. The new law becomes effective on August 1, 2024 . Quick Hits Louisiana’s Act No. 556 allows employers to establish policies concerning when an employee earns a commission, incentive payment, or bonus . Examples include adjusting such compensation where the employer does not receive payment from a customer and adjusting commissions when there is a change order. Act No. 556 extends the time by which an employer must determine an employee’s eligibility for a bonus under a bonus plan that utilizes financial information that reflects the employee’s or employer’s performance. To take advantage of the new law, the employer’s compensation policy must be in writing . The new law also overrules jurisprudence that deemed some provisions in employer bonus policies and agreements to be wage forfeitures....