Holiday Bonus Etiquette for Association Employees and Vendors
Whether you live in a suburb or in the heart of the city, an HOA or high-rise condominium, things can get pretty expensive.
The holiday season compounds the issue: there are gifts to be bought, travel to be booked, parties to attend and the stress that many Boardss feel when trying to figure out what kind of bonus to give the people who (hopefully) make their everyday life a little easier: the building or HOA staff.
A reward for work well done is a welcome gift, especially at this time of year. Property Managers, chief engineers, maintenance personnel, front desk staff, housekeepers and pool & spa attendants all work diligently throughout the year to deliver the lifestyle that you expect.
An association’s staff in Florida spend most of the year dealing with heat, humidity, and the merciless southern sun as they go about their duties. Regardless of the temperature, your staff stands ready to help you with your shopping bags or simply to greet you with a warm “welcome home” greeting.
Many of the properties managed by KWPMC look forward to recognizing their staff during the holiday season with some form of bonus. So, if you are looking for guidelines on issuing a bonus, you came to the right place.
There are different methods that Boards use when it comes to paying staff bonuses. Many associations plan for the annual bonus by including the expense in the annual budget. Some boards use a percentage of salaries to calculate their bonus while others use a flat fee. Since you should be finalizing next year’s budget now, you may consider adding this line item if you don’t already have it.
In some parts of the State of Florida, it is customary for boards to “pass the hat.” That is, they ask each owner or resident to make a contribution to the staff bonus program. Whatever gets collected gets paid out to the staff.
Once the funds are collected, then the Board has to decide how much each staff member receives for their share of the bonus. Boards often take into consideration seniority, responsibility and quality of an individual’s performance when establishing the bonus distribution. In some cases, Boards pay an equal share to all staff members. More typical, is for the Property Manager to receive the largest bonus. The other staff members may get a flat rate based on the available bonus funds. Regardless of the distribution method that works best for your association, it is good to have a logic behind the individual bonus paid out.
We highly recommend following standard payroll procedures when issuing bonuses. Some Boards consider paying cash, but it is best to let the management company or payroll processing firm issue the bonus through a normal payroll run. Cash bonuses should be accounted for as personal income to the employee. Don’t put the burden of reporting the income on the employee by paying cash or issuing a 1099 for the payment. Employees appreciate receiving the payment, but they certainly do not want to deal with the hassle of reporting a separate income stream on their tax returns.
According to etiquette-master Emily Post, holiday bonuses “are a way to say ‘thank you’ to those who have provided service to you throughout the year – letting them know you’re pleased with what they have done for you.” And, we can assure you that your staff will work extra hard and appreciate the additional pay!