Wages Defined: Commissions, Vacation Pay and Bonuses under Kentucky Wage and Hour law

The Kentucky Wage and Hour Act contains a definition of wages to include “any compensation due to an employee by reason of his or her employment, including salaries, commissions, vested vacation pay, overtime pay, severance or dismissal pay, earned bonuses and other similar advantages agreed upon by the employer and employee or provided to employees as an established policy.”

When vacation may be vested or when bonuses and commissions are “earned” and therefore payable as wages can be problematic but the employers’ best defense is to commit such benefits entitlement (or non entitlement) to writing or at least as a general company policy. If the employer requires all vacation time to be used before separation of employment, or it intends that no commissions received by the employer should be paid post separation, it should clearly express that policy.

Wages must be paid within 18 days of the last day worked and the failure to pay wages may subject the employer to liability for the wages and an equal amount as liquidated damages plus the employee’s attorney fees.