I though it was so all the the severance payments happen this year but my accountant spouse says it can all be recognized right away.
Are we holding onto false hope it will have to happen before 11/1 because of the 60 days?
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The company is REQUIRED to use accrual based accounting. That means you book an expense when it happens, not based on cash movement. Therefore, if they declare the layoff the LAST business day of 2023, it is a 2023 expense.
@rel+1p83cSg0
Incorrect, at Schwab you have to be employed on bonus pay day (March) not 1/1.
I think the company is well within its rights to pay a 2023 bonus to employees not employed on exactly 12/31. Not clear to me why that’s a sticking point here regarding the date.
Wifey is always right. Wifey material right there.
Thanks for the info and raising the question. I was wondering the same and to me and how much Walt talked on cnbc about the care taken on the TG's it seemed like this would happen after tg4.
If you read the bonus policy you’ll see that to be eligible you have to have a good performance rating by the year end and also be employed at the time of the bonus pay out day, which is early March. Are they making an exception for laid off employees in this case?
The communication from Walt this week was that the firm wants to make laid off employees ELIGIBLE for the 2023 bonus with the 60 day employment window. This implies a November date.
The takeaway is that nothing makes sense. The company wants to save money with a layoff but isn't changing package terms or accelerating salary avoidance? They want to add the cost of a bonus payout? Save money by selling depressed market real estate yet lack seats and forcing RTO?
Best to prepare for the worst and focus on skills, marketability and financial independence. Playing whac-a-mole with people isn't nice.
Yea it’s just about the WARN notice period. 60 days before their last day would be. So if they do it mid November that would mean the last day is in mid January and “technically “ 2024 is when they’re effectively no longer an employee…
However I’m not holding my breath on anything anymore. Just gonna keep half assing it till it’s over
@szi+1p83cSg0
It is better to refer to the spouse as the "wife", instead of the proper title of, the "lesser one" in the marriage". However, if your spouse is the "husband", maybe "His Greatness" would be more appropriate.
Spouse is correct. Both the severance payments AND bonus will be accrued and allocated to corporate tax year 2023 whether they are paid out in 2024 or not. Our bonuses are earned and accounted for in the budgeted year they are earned (even though it gets paid in the next year). If 60 days start in 2023 that we be accounted for in 2023. Accounting is a fickle beast and this is how it works...the down side of extra PAY (severance) in 2023 is more may be taxable depending on your bracket and how much severance.
My wife is right!
The 60 days of pay is separate from severance payment - that’s not paid in lump sum unless you find another job. Salary and benefits continue over the 60 days so speculation was that they would want you off the payroll as of year end. Plus new benefits start on 1/1 as does RTO. So CRE will be assigning seats and making room for employees who won’t need them. Absolute execution failure. Who knows when it will happen - we might be on this board wishing everyone a “happy” new year while still waiting …
can someone help me understand why it would be better to recognize the severance/layoff expenses in 2023 instead of 2024?
60 days are there because of WARN laws. Instead of giving the employee 60 days notice prior to layoff, most companies keep them on the payroll for 60 days after they are laid off. Not doing so would violate the law.
If you are still an employee on 12/31/23 you would be eligible for the bonus that pays in March. Assumption is the company would not want people on the books 12/31 to save on paying the bonus. Now Walt says they will be paying the laid off people bonuses so I don’t think this theory applies anymore.
@xmj+1p83cSg0 why do you refer the “spouse” as the wife? It can be the husband. Don’t be s-xist.
respectfully, your wife is wrong.