A bonus worthy of Scrooge

Automotive workers in Michigan given $15 gift certificates by employer — employer then deducts $5.51 from paycheques to pay federal and state tax on the bonus


Workers at an automotive plant in Traverse City, Mich., got what they thought was a nice, albeit small, pat-on-the-back for a job well done when management handed out $15 (U.S.) grocery and retail gift certificates before Thanksgiving.

However, Tower Automotive has since decided the cards are “same as cash” gifts subject to federal and state income taxes totaling 36.75 per cent. That means workers will be faced with a deduction of $5.51 on their next paycheques to pay for the bonus.

“It’s got a lot of people ticked off,” Donald McKee, a welding technician who has worked almost 13 years at the plant, told the Traverse City Record-Eagle. “This is the lowest they’ve gone yet to give us something and then take it back.”

A Tower manager who didn’t want to be identified told the newspaper the situation was “very unfortunate.” The manager also said some employees had returned the cards.

United Auto Workers Local 5110, the union representing about 300 hourly workers at the plant, has filed a contract grievance over the matter.

Workers at the plant are still getting a Christmas bonus, in the form of gift certificates that can be redeemed for holiday turkeys or hams without them being considered cash income.

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