Bonuses After Tax Cut Don’t Always Live Up to Their Billing

https://www.nytimes.com/2018/02/02/business/bonus-tax.html

By PATRICIA COHEN FEB. 2, 2018

What’s not to like? Scores of companies, including some of the country’s biggest employers, are handing out bonuses, announcing with a flourish that they are sharing the windfall from corporate tax cuts with their workers.

A look at the fine print, though, shows that some of the largess is not nearly as large as company news releases suggest.

Consider retailers like Walmart, Lowe’s and Home Depot. They’ve tied the size of bonuses to tenure, so that only employees who have been with the company for 20 years or more will receive the $1,000 maximum that was highlighted in their announcements. Few employees meet that requirement.

The median tenure for retail workers, according to the Bureau of Labor Statistics, is three years. At Walmart and Home Depot, that work history results in a $250 bonus, and at Lowe’s, $200. And nearly a quarter of American wage and salary workers have logged less than a year with their current employer. For them, bonuses at these big retailers will range from $150 to $200.

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What’s not to like? Scores of companies, including some of the country’s biggest employers, are handing out bonuses, announcing with a flourish that they are sharing the windfall from corporate tax cuts with their workers.

A look at the fine print, though, shows that some of the largess is not nearly as large as company news releases suggest.

Consider retailers like Walmart, Lowe’s and Home Depot. They’ve tied the size of bonuses to tenure, so that only employees who have been with the company for 20 years or more will receive the $1,000 maximum that was highlighted in their announcements. Few employees meet that requirement.

The median tenure for retail workers, according to the Bureau of Labor Statistics, is three years. At Walmart and Home Depot, that work history results in a $250 bonus, and at Lowe’s, $200. And nearly a quarter of American wage and salary workers have logged less than a year with their current employer. For them, bonuses at these big retailers will range from $150 to $200.

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At the same time, some corporations offering bonuses will be able to subsidize their payouts with taxpayer funds. If they announced their plan before the end of 2017, they will be allowed to deduct the cost of the bonuses at last year’s 35 percent corporate rate, even if they pay employees in the early months of 2018, after the rate dropped to 21 percent.

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