Metro Detroit tax expert explains why companies should offer bonuses

Posted at 5:25 PM, Jan 25, 2018
and last updated 2018-01-25 17:29:13-05

More and more companies are handing out bonuses to their employees, thanks to the corporate tax cut.

Fiat Chrysler announced a $2,000 bonus to all of its employees.

That's in addition to a $5,500 profit sharing check hourly workers will receive.

Home Depot and Starbucks are also handing out bonus checks to their employees.

Rick Bloom of Bloom Asset Management explained, "It gets to be like a domino effect. A few corporations announce bonuses and then others have to join in."

The bonus checks come after the corporate tax rate was reduced from 35 percent to 21 percent.

Bloom says corporations should be taking some of the money they save in tax cuts and passing it down to workers.

"This is a way also to retain employees and to get employee loyalty is to give money back."

Starbucks and Walmart announced wage increases, but Rick says don't expect to see many companies following suit just yet.

"Raises are permanent, bonuses are discretionary," he said. "Corporations wanted to give themselves flexibility and that's what bonuses do."

Rick tells us companies giving bonuses are sending a message to President Trump.

"I think they are rewarding the president for pushing through a tax reform," he said. "What the proof will be is where are we next year. Will you see corporations continue to give these bonuses?"

The tax cut can also help if you're looking for a new job.

Rick says it's okay to ask for a signing bonus, which will come in handy if your current company won't give you a bonus.

"If your employer didn't give you a bonus or if you are underpaid, this is a good job market to say 'I'm going to start looking for other alternatives.'"