I am sure many of you are not aware of what this means! I didn’t. With unemployment so low, many companies are offering signing bonuses. While this may be new in media, it is not for other industries. With high competition to hire quality talent, we are seeing this come into play much more. Often this is a one time bonus paid on the employees first day of employment. It can be in cash or merchandise. We had one client who knew the new hire was moving so got her a large screen TV for her new living room.
These can start out a new relationship in a wonderful way; the new hire is being welcomed with open arms. It is advisable to include some verbiage that if the person leaves within X amount of months, they will need to pay back a portion. Unfortunately, sometimes the relationship takes a turn and that new hire departs before meeting the designated time, thus needs to repay the company. This is called a “Clawback”. The case can be similar for those who have gotten relocation packages. While this is a great incentive, it can create a headache for the payroll department. They need to not only consider what portion needs to be paid back but to also consider taxes that have been paid, etc. If you decide to go this route, bring in your finance and HR team to approve and lay out the proper disclaimers.