Bonus Payment

[dolfan82]

Arizona.

Hello, so I'm just going to try to keep it short.
So for the second time, this pay period, my employer has decided to not make the paystubs available for us to view through Workday. Usually they're always available on Thursday at 12 AM. No big deal, right?
Well, what happened last time, they deeply apologized and told us that that they were working on it but that we would still get paid on Friday like usual. Again, no big deal, right?
Well, so this is how the company works; we receive a performance bonus on the last paycheck of every month, which would be tomorrow. Now, what the company did last time, they paid us our regular wage check on Friday BUT decided to delay the bonus check until the following Monday. No big deal, right? Well what happens now is that instead of the tax deductions being included in the same paycheck, now we're being deducted twice; one for our regular wages and another one for our bonus check, which is an insane percentage that gets taxed.
Now, is this legal or unethical on their part? Any legal action we employees can take?

Thank you

 

[LdiJ]

Arizona.

Hello, so I'm just going to try to keep it short.
So for the second time, this pay period, my employer has decided to not make the paystubs available for us to view through Workday. Usually they're always available on Thursday at 12 AM. No big deal, right?
Well, what happened last time, they deeply apologized and told us that that they were working on it but that we would still get paid on Friday like usual. Again, no big deal, right?
Well, so this is how the company works; we receive a performance bonus on the last paycheck of every month, which would be tomorrow. Now, what the company did last time, they paid us our regular wage check on Friday BUT decided to delay the bonus check until the following Monday. No big deal, right? Well what happens now is that instead of the tax deductions being included in the same paycheck, now we're being deducted twice; one for our regular wages and another one for our bonus check, which is an insane percentage that gets taxed.
Now, is this legal or unethical on their part? Any legal action we employees can take?

Thank you

Splitting the regular check and the bonus check into separate checks should actually reduce or leave the same the amount of taxes that are withheld (in total) rather than increase them. The bigger the check, the potentially higher the marginal tax bracket and therefore the higher percentage withheld. Therefore, you are probably looking at it incorrectly.

 

[PayrollHRGuy]

I agree with LdiJ but if an employee has listed a dollar about either in addition to or instead of the calculated withholding on their state and/or federal withholding form one could get into a situation where two checks could cost more.

 

[Zigner]

Besides - it will all come out in the wash at the end of the year either way.

 

[LdiJ]

I agree with LdiJ but if an employee has listed a dollar about either in addition to or instead of the calculated withholding on their state and/or federal withholding form one could get into a situation where two checks could cost more.

Valid point. I had not considered that scenario.

 

[PayrollHRGuy]

I also wonder if the OP is seeing double deductions, not just double tax withholding.

 

[LdiJ]

I also wonder if the OP is seeing double deductions, not just double tax withholding.

You mean things like health insurance, 401k etc.? That is possible, although it would be seriously double dipping on the employer's part as far as health insurance is concerned.

 

[PayrollHRGuy]

That is what I meant and I don't mean they are doing it on purpose. On a lot of payroll systems if there are multiple checks for the same employee in the same pay period the system will duplicate the deductions if the person that is running the payroll doesn't take steps to tell it not to.

 

[TigerD]

It is always better to communicate than to litigate. Talk to HR about the issue. It sounds like they they are having issues with the software and not like they are intentionally trying to screw the employee.

 

[Chyvan]

Any legal action we employees can take?

If you think this is a permanent way of doing things, and your check is being taxed at the flat 25% bonus check rate, then adjust your withholding and claim more allowances.

 

[LdiJ]

If you think this is a permanent way of doing things, and your check is being taxed at the flat 25% bonus check rate, then adjust your withholding and claim more allowances.

There is no such thing as a flat 25% bonus check rate.

 

[ShyCat]

There is no such thing as a flat 25% bonus check rate.

The flat withholding rate for supplemental wages in 2018 is 22%. In 2017, it was 25%.

 

[LdiJ]

The flat withholding rate for supplemental wages in 2018 is 22%. In 2017, it was 25%.

In 35 years of accounting and tax, including doing payroll from time to time, I have never heard of a flat withholding rate. You learn something new every day. After some googling, I understand why I never heard of it, and that is because I have never been involved as an employer or employee with any company that treated any payments to employees as "supplemental wages".