I (21M) work in a local bank and am paid comparatively well for a college student but still what equals out to minimum wage after inflation. Anyways, I qualify for a 401k plan and have been making regular contributions. The company makes an end of year bonus match to a 401k. Last night I found out that there’s such a thing as a “vestment schedule”. For those of us who don’t know, it means that I own 0% of my bonus until I’ve worked there for one year and then will graduate to owning 20% more per year til I am 100% vested after 5 years. This brings up some lovely points that make me quite angry.
1) I’m technically not really getting a bonus
2) the bank gets decent tax deductions from this
3) if I left right now I wouldn’t get anything
4) if I was laid off for any reason I would lose the “bonus”
5) HR never once mentioned this to me and only found out after extensively reading their handbook and found out by myself
Just a bit of a heads up to those who’s employers do this. This just seems like a heavy handed tactic to force people to stay or to just recoup some of their losses in the form of bonuses to employees. This is for the US btw. And yes this is 100% legal and a fairly regular practice it turns out.