The Brown & Crouppen Legal Lens takes a closer look at everyday legal issues and gives you a better understanding of topics that may affect you.
ST. LOUIS – Accepting signing bonuses for a new job can be both exciting and nerve-racking.
But why do companies offer signing bonuses?
“It’s a hot thing now. There are a few reasons they offer them,” said Andrea McNairy, managing attorney at Brown & Crouppen. “One: make it equitable and equalize what people make in the company. Two: to compensate you for income you make before going. Finally: to attract employees and beat out competitors.”
What are things to talk about?
“You have to remember you’re being offered this strategically and the questions you need answered before you agree to terms of bonuses or in lieu of a yearly raise. Two: is the money upfront or overtime? Three: are you required to stay with the company a certain amount of time? Four: Biggest one. If you don’t (stay) are you required to pay back the bonus and what would that look like? None of these may be deal-breakers but questions you want to ask and have answered.”
McNairy said you could see several types of bonuses.
“(Businesses ) are now giving different variations of what we just mentioned. It sounds great,” she said. “Someone wants to give you a lot of cash, but what are the terms? Finally, what are your requirements to be able to receive and keep that bonus?”
But McNairy warns people can get into trouble over their bonuses.
“I have seen companies go after people to repay bonuses at the end, so out of all these questions we’ve asked, you definitely want to find out what happens if you don’t fulfill their requirement to keep that bonus,” she said.