California Employers Cannot Use Cash and Merchandise Shortages In Bonus Calculations For Non-Exempt Employees, and Cannot Use Workers' Compensation Costs for Any Bonus Calculations

On October 23, 2003, a California appellate court made several significant rulings regarding the permissible structure of employee bonus plans. In Ralph's Grocery Company v. Superior Court, 2003 Cal. App. LEXIS 1592, the court addressed what factors California employers can and cannot incorporate into profit-based bonus plans.