Idaho is offering cash bonuses to employees who return to work as the state lifts COVID-19–related restrictions and businesses reopen. In an effort to incentivize employees who are now earning more money due to the additional benefits provided through the Pandemic Unemployment Assistance program, Idaho has implemented a Return to Work Bonuses program. The bonuses are one-time payments that will be issued on a “first-come, first-served basis” until the $100 million in funding expires.
Eligible full-time employees (i.e., working at least 30 hours per week) will receive a one-time bonus of $1,500 and part-time employees (i.e., working at least 20 hours per week) will receive a one-time bonus of $750. Employers must apply for the bonuses on behalf of their employees, and the Idaho State Tax Commission will accept applications on a “rolling basis” between July 13, 2020 and August 7, 2020, depending on when employees return to work. In order to be eligible for the bonus, employees must have returned to work between May 1, 2020 and July 1, 2020, and must have been back at work for at least four consecutive weeks at the time the application is filed. The bonus is also available to employees who are “returning to work with a new employer.”
This bonus is available only to those employees who filed for state unemployment benefits on or after March 1, 2020. This means that employees who worked throughout the pandemic are not eligible. Additionally, employees must earn no more than $75,000 annually to claim the bonus.
Private or nonprofit employers that issue Form W-2s to Idaho employees directly or through a contract with a professional employer organization are eligible to apply for bonuses on behalf of their employees. Employers must establish a Taxpayer Access Point (TAP) account prior to filing their applications. It takes several days to complete the registration, so employers may want to create the account now in order to submit their applications as soon as the application window opens. Detailed information on how to create a TAP account and complete the bonus application are available on the state’s Return to Work Bonuses website.
The website Transparent.Idaho.Gov will report all bonuses awarded to employees. The report will include the individual’s name, industry sector, primary city location, and total bonus award.
There is no obligation for an employer to apply for the employee bonus. However, the state’s new bonus program presents a catch-22 scenario for Idaho employers. For example, if employers continued to employ some, but not all, workers through the pandemic, employee morale issues may arise if bonuses are given to employees who returned to work but not to those who continued to work. On the other hand, if employers choose not to apply for the bonuses, employee morale issues could develop with those employees who are returning to work.
Idaho is funding the bonus program with money provided to states by the federal government as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Each state has the ability to decide how to best use the designated money for its residents.
Ogletree Deakins will continue to monitor the states to determine if any other states implement similar programs, as well as report on developments with respect to the ongoing COVID-19 pandemic. The firm will post updates in its Coronavirus (COVID-19) Resource Center as additional information becomes available. Critical information for employers is also available via the firm’s webinar programs.