The Wall Street Journal-20080205-When You Still Need to Repay Signing Bonus

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When You Still Need to Repay Signing Bonus

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Q: I agreed to repay a $4,000 signing bonus if I leave voluntarily within a year. Since then, my employer has split, and I now work for the second entity. Do I have to repay the bonus if I leave this new organization before my one-year anniversary?

A: Most likely you do, say legal and human-resources professionals. When companies split, the new organization often takes on many terms and obligations of its parent. This probably would include your bonus- repayment agreement, says Natalie Wyatt-Brown, an attorney in Minneapolis.

Most bonus-repayment agreements include the date when you no longer owe the money if you leave and the reasons for leaving before this date that would trigger the repayment, says Peter Vergano, senior manager of HR strategic staffing at Samsung Electronics America Inc.

In the case of a merger, acquisition or spinoff, "things get trickier," says Mr. Vergano. Your job may be eliminated or transferred to the new company or you may decide to leave before your one-year hiring anniversary. In the last scenario, you would likely owe the money because your current employer grew out of your first.

One way to know whether you should repay the money to your employer is if your repayment agreement includes an assignment clause, says Ms. Wyatt-Brown. Asking your HR representative whether hiring-bonus- repayment agreements still hold for employees assigned to the new organization is another way to find out, says Mr. Vergano.

If you decide to job hunt and get an offer prior to the repayment date, you could ask your prospective employer to take care of your debt.

Quitting voluntarily without repaying your bonus leaves you open to being sued or possibly having the debt listed on your credit report, Ms. Wyatt-Brown adds.