A payment made to an employee as a bonus or incentive when retiring or terminating is not a payment for services rendered. Rather, the payment is made in exchange for an employee's promise or notification of intent to retire or terminate. A retirement or termination bonus or incentive is not reportable compensation.
Example: | A collective bargaining agreement authorizes a school district to pay employees a higher salary during the last two years of employment if the employee gives written notice of his or her intent to retire or terminate. Because the payment is in exchange for the agreement to retire or terminate and not for services, the payment is not reportable compensation. |
[Statutory Authority: Chapters
41.32, 41.34, 41.35,
41.50 RCW. WSR 01-01-059, § 415-110-487, filed 12/12/00, effective 1/12/01.]