So I left my previous job after 9 months to move up to the Bay Area for my current role. Good move for my wife too since her HQ is up here and she got a great promotion. I just got a letter from my previous company reminding me of my obligation to repay my sign on bonus in full ($5000) and I’m really wondering if I should even bother? I’d be inclined to do a settled amount $1250 (5000 / 12 x 9 mos) but they didn’t even pay me out on my unused PTO and they’re asking for the bonus amount before tax which was already withheld. Should I just ignore it or is it worth it to send them a settled amount with a notarized letter from an attorney? There’s also a serious HR issue I had with my boss that made it very unlikely that I would stay long term anyway but I didn’t want to share since it happened like 2 days before my end date anyway.
You have to pay it. You agreed to it. They will collect it if you don’t.
What was the HR issue with your boss?
Well I told them I was leaving since my wife had a good opportunity to move here for her Job: he said in a room with ladies present “Give me your wife’s phone number so I can call her to locate your balls.” Attitude like that there’s no way I’d consider working remotely or out of their SF office until the bonus period was up.
Oh, no, save the Ladies sensitive ears!
Your previous offer letter should say what the terms of sign-on bonus were. Usually it’s prorated but if it didn’t say that and you signed I don’t think an attorney can help you. Your benefits doc should have had terms for PTO cashout. I believe that’s a fair ask from your side unless there was a funky clause in there as well.
You have to pay it back to employer full money. Tax money is with govt and you need to file tax return and get it back
Your company must pay out your accrued PTO days within 72 hours of you leaving your job. If they don’t compensate you for unused PTO, they are violating California state labor laws.
OP may not be in CA?
Not giving advice either way, but in practice, many companies won't bother to pursue you if you don't pay, especially in a case like this where the amount is so small. If you pay the 1250 they will likely come after you.
I had a similar issue. I just left it and it went away... it doesn’t affect your credit until they put a mark on it and then if you pay it it’s removed entirely. Low risk to seeing what happens...
State’s have different rules around when PTO needs to be paid out but ultimately you should be paid for anything accrued. If you decide to pay back the bonus, I’d ask your employer to calculate the net amount owed and to provide the calculation which shows reducing your gross income. This way, your W2 will be reduced by the bonus, employee tax will be corrected on the next quarterly filing, and employer portion of tax would be reduced as well. Very simply, they can run a “fake” payroll that shows negative bonus of $5k, then you pay them back the net amount owed after taxes.
I don’t think the risk is worth it. Safer to pay it and chalk it up to experience gained. Definitely fight them on the PTO. I had to repay a $10k sign-on after leaving a job. The company agreed to subtract my PTO from that amount and then let me split the remainder over 10 months. I had to file the correct forms with the IRS to get credit for the amount withheld in tax. Good luck!
They are doing the tax thing correctly. The government has that money, you get it back when you file your taxes (or an amended return if the bonus was paid during the last calendar year).