Thread regarding 3M layoffs

Pretty typical that an employee won’t get their bonus if they quit before the end of the year. But given the historical origins of AIP and 3M’s aversion to calling it a bonus for decades makes it seem like it should be paid out on a pro-rated basis whenever an employee departs regardless of the reason.

Typo in previous post:
My previous post should have ended with "left 3M in February 2022, but still received the AIP payout in March 2022.

"I suspect it's the same for quitting."

If you leave 3M before Jan 1 of the following year for any reason other than retirement or death, you forfeit all AIP for the year. It doesn't matter if you quit, get laid off, or get fired. It doesn't matter if you voluntarily quit in January or get laid off in December. Employees who retire during the year will receive a pro-rated AIP payment the following March.

The other question that gets asked is "What if I terminate in January or February, after the previous AIP year is over but before the payout is made in March?" In that case, you will still receive the full AIP payout for the previous year but no AIP for the partial year that you worked. This was the case with my spouse who left 3M in February 2022, but still received the AIP payout in March 2023.

Re: I suspect it's the same for quitting.

If you resign before Jan. 1 of the following year you get $0.00. It was explicitly stated in documentation on 3M Source at the time I looked into this topic. To confirm 3M's position on the matter, I also spoke with the HR Helpline directly. Guessing 2 week notices are fairly common on Jan. 2nd.

uh, I think the stuff mentioned is wrong. At least for retirements, if you leave before the end of the year, in the following year you get a prorated amount of the AIP. I suspect it's the same for quitting.

@s1+1jn6xke6k

They can do it because it's in the employee contact. You let them in exchange for a job and pay. Presumably you learned about this from documentation, not a rumor handed down by or-l tradition from the Miners of old?

In this case it amounts to The Golden Rule. Them who has the gold makes the rules.

Thanks all for the background and historical context on AIP. So, as I understand it, AIP is NOT a bonus but rather simply a portion of your pay that is variable based on the performance of the company. A portion of your pay that is “at-risk.” This understanding is consistent with the fact that the word “bonus” is entirely absent from any AIP plan documents, FAQs, Total Rewards info, or anything else on 3MGo. Look for yourself.

If the above is all true, HOW IN THE WORLD CAN 3M REFUSE TO PAY A DEPARTING EMPLOYEE VARIABLE COMPENSATION IF THAT EMPLOYEE QUITS PRIOR TO 1/1???

Again, variable pay is NOT a bonus. The employee ALREADY performed the work. The variable compensation is still owed. It seems the only question that remains is what is the rate of pay for the work already completed?

Can you imagine if McDonald’s try to pull this shenanigan with its employees…tell them that a portion of their pay is variable based on same restaurant sales, then an employee flips burgers for 300 days, quits, and then gets none of the variable pay? They ALREADY flipped the burgers. Huh?

How is this even possible? How is this legal? What kind of company is this?

Went thru the implementation of AIP, given to you in leu of pay raises for about 3 years to make up ten percent variable pay. It was distributed quarterly and because of the nature of how the plan was implemented, you were darn good and ready for that quarterly check. Eventually the rules changed and our variable pay was reduced to 7.5 percent and we were given a hard raise of 2.5 percent over and above our normal annual hard raise. Then variable pay changed to annual distribution. I don’t recall the reasoning but at one point someone started calling that variable pay that we sacrificed raises for a “bonus”, causing a near mutiny.

Better to have an increase in base than a random bonus. Plus, there isn't anything I can really do to move the dial.

Excellent point about how AIP was a bait and switch to "justify" smaller raises. You could, in theory, have a banner year and make more than you would have if they had just given an extra 1 to 2 percent annual raise about the measly 2 percent most got.

I think this dates back to Desi time in the 90s. I'd rather have cumulative raises over the years than one big banner year.

"Check your facts. AIP has never been 0, mostly because management depends in it, it is half pay for them."

Actually you could rightly say that AIP of 100% is actually $0. If you were around when AIP was started you remember that a portion of your base salary at that time was taken away, put risk, and called your Annual Incentive Plan "AIP". So an AIP of 100% is just getting what would have previously been your full base salary.

Part of this depends of your state. Those few hundred (maybe?) Left of what was once a 2000+ workforce in Austin Texas pay no state income tax. Maybe closer to 30.

Those in Minnesota probably pay 40 percent as the state income bracket is either 7.85 or even 9.85. I bet double income 3Mers are getting hit with the 9.85 rate. They don't call Minnesota Land of Ten Thousand Taxes (and Lakes) for nothing.

Check your facts. AIP has never been 0, mostly because management depends in it, it is half pay for them.

AIP is classified as supplemental income by the IRS and withholding is calculated differently. It you're interested in the details, reference IRS Publication 15 (Circular E) Employer's Tax Guide. https://www.irs.gov/pub/irs-pdf/p15.pdf

AIP is considered a bonus, and so taxes are withheld at the highest rate.

That doesn't mean it's actually taxes like that, just that more taxes are withheld.

The idea is that bonuses aren't regular, reliable income and you would be pi---d if a big bonus meant you ended up owing taxes in April, so they withhold extra and you can get that money back in the form of if a refund or by adjusting your W-4.