Pay rise to be paid as bonus each year

funkyjams

Hello
My employer has been promising a review for a while now, and today I received a letter saying that my salary has been increased. BUT the extra money will be paid at the end of each year as a lump sum, providing, of course, I still work there.
I do appreciate the extra money but this has annoyed me a little. It means if I leave before December, I wouldn't get it, so it's not really a salary increase is it?!

Voltaire7

Guess not, but what do you think your options are?

Southend1

Could you negotiate a compromise? Are other employees in the same situation? is there a recognised union?

funkyjams

Thanks for the replies. No union, it's a media company.
I was hoping someone would give me some ammunition before I talk to them. I can't see it's a salary increase (as they describe it in the letter) if it''s not paid pro rata when I leave.
It just seems a bit sneaky! And it makes it harder to put a regular sum into my pension etc.

ohreally

funkyjams wrote: »

No union, it's a media company.

Not a barrier to you joining a union. If enough colleagues join you then recognition will follow.

Spidernick

The problem with them doing this is that:

a) The bonus probably won't be counted by the lender for any mortgage application;

b) It won't be pensionable (if you are in an employer's pension scheme where the employer contributes a percentage of salary); and

c) Your base pay remains the same, so any future pay rise linked to a percentage of pay will start from a lower base than it would have done if this bonus was paid as an actual pay rise.

On the plus side, if you are not earning enough to pay 2% rather than 12% national insurance, then having the bonus all in one go may save you some national insurance, as NI is looked at individually on a month-by-month basis, so some of the bonus may go into the 2% bracket, whereas it might be all taxed at 12% where paid evenly throughout the year.