Consider a bonus occasional if both the fact of the payment and the amount are determined at the sole discretion of the employer at or near the time of payment.

Consider a bonus to be a regular part of the employee's pay if it is:

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  Paid pursuant to a prior contract, agreement, or promise causing the employee to expect such payments regularly; or

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  Announced to induce the employee to work more steadily, rapidly, or efficiently or to remain with the firm.

Before the school year begins, the school board makes an agreement with substitute teachers that they will receive a $500 bonus for every thirty days of substitute teaching. Since there is a prior agreement and the school board uses the bonus as an inducement to continue substitute teaching, consider the bonus as a regular part of their pay.

Bill Jones arranged to work January through May 2012 and then retire. The employer pays them $2500 in lieu of vacation. Bill's union contract provides for a vacation credit of four weeks for services rendered in the prior year. The contract also provides for crediting additional days of vacation in the year of retirement. Therefore, in Bill's year of retirement, they are eligible for one additional week's vacation, giving them five weeks’ vacation, three of vacation time, when they retire. The question becomes when did Bill earn the $2500 they received in lieu of vacation. Since there is a written plan that shows that they rendered services for $2000 of the payment in 2011, consider the $2000 earned in 2011. Consider the remaining $500 of the vacation pay earned in 2012.

Ben Brown becomes ill on 05/06/2011 and does not return to work. Consider the employment relationship terminated as of 05/05/2011. They receive sick pay through 12/31/2011. Sick pay for the first 6 months after 05/2011 are wages, but we charge the wages to 05/2011, their last month of actual work. Exclude sick pay for the seventh month after 05/2011 from wages under section 209 of the Act. The non-service months are 06/2011-12/2011.

A beneficiary retires in April as specified in the employer's plan, and they receive a $10,000 lump-sum payment for accumulated unused sick leave. The lump-sum payment is not “wages” for earnings test purposes. For information on retirement pay and income that is not wages for earnings test purposes, see RS 01402.326 and RS 02505.045.

If the employer's plan provides a lump-sum payment of accumulated unused sick leave when the employment relationship terminates and the plan does not specify retirement as a condition, consider the wages for earnings test purposes and count in the last month of employment.

A beneficiary’s contract to teach school from September through May provides for equal monthly payments from September through August. The employment relationship terminates in May. The beneficiary attains age 62 in June and applies for reduced retirement insurance benefits. We count the salary the beneficiary receives for June, July, and August in May, which is the last month of employment.