Jefferson City-based Hawthorn Bank announced Thursday it will give employees bonuses of up to $1,000 because of the recent tax cut passed by Congress.
Full-time employees will receive bonuses of $1,000, and part-time employees $500. Hawthorn became the second local bank to give bonuses after Congress passed a sweeping tax cut for businesses and individuals in December.
Hawthorn Bank's board of directors approved the bonuses at its January board meeting, said Gregg Bexten, president of Hawthorn Bank's central region.
"It's very emotional for some of these people," Bexten said. "A thousand dollars for a bank teller or customer service representative - that's a lot of money."
With assets of $1.4 billion, Hawthorn Bank employs more than 300 people at 23 branches throughout Missouri. Hawthorn Bank CEO David Turner said in a news release the company expects the tax cut to spur economic development.
"We felt it only right that our people should share in that success," Turner said. "We also want to express our appreciation for their hard work, helping our customers and building the solid relationships that we have in our communities."
President Donald Trump signed a bill Dec. 22 that overhauls the nation's tax code. Under the new tax bill, the corporate tax rate drops from 35 percent to 21 percent. The bill also restructures the seven personal income tax brackets and increases the standard deduction to $12,000 for individuals and $24,000 for married couples who file jointly.
Because Trump signed the bill before the beginning of the calendar year, the changes took effect Jan. 1. Americans won't see any changes to their taxes until 2019, when they file their 2018 tax returns.
After Trump signed the bill, a handful of companies began issuing $1,000 bonuses to employees. Since then, companies like Starbucks, Lowe's, Home Depot and others have announced plans to give similar bonuses.
Jefferson City-based Central Bancompany announced Jan. 5 it planned to give its 2,500 employees bonuses because of the tax overhaul.
Last week, USA Today reported 1.3 million U.S. workers will receive cash or stock-based bonuses because of the legislation. At an estimated value of $1.7 billion, it still pales compared to the $10.3 trillion in wages, salaries and benefits paid by U.S. companies in 2017, according to the U.S. Department of Commerce.
Swiss-based financial services firm Credit Suisse estimated Fortune 500 companies will pay $75-$100 billion less in 2018 taxes because of the tax cut.
Bexten said Hawthorn Bank evaluates how it can raise wages each year. He could not say whether the bank studied permanent raises for employees because of the legislation.