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The Tax Windfall

WHAT CAN YOU DO SOONER RATHER THAN LATER?

• Create talking points to disclose your intentions (preferably before the season ends) so team
members aren’t left to speculate about what did, will, or won’t happen.

• Consider a fully integrated compensation plan that measures and values skill, eort, and
responsibility. Solid knowledge of market wages, along with accurate, defensible pay grades, will
position you competitively as a desirable place to work.
• Help employees understand what a career path can look like, including sponsored education and
succession planning. They will celebrate a fully integrated plan over the appearance of "shooting
from the hip."
• Consider adding cash awards to base wages over bonuses or non-cash subsidies, as base increases
are likely to have more meaning to more people now.

• Monetize the full impact of your tax credit and act accordingly within balance of your master
plans, operational needs, and sustainability.
• Publicize what you do. Integrate messages to highlight your “total” investments for sta, just as you
would for capital improvements, infrastructure, and technology. This is an excellent time for
transparency.

This type of thoughtful and strategic approach to sal- premise of the bill is that it will enable businesses to (re)
ary improvement is essential for resorts focusing on how they invest more dollars in the company, but in many cases this is
can remain competitive, close wage gaps, and de-compress creating an anticipation among employees that higher wages
salaries while balancing business and operational needs. are soon to follow.
Resorts may be tempted to use all of the tax savings else-
Tax Reform Opportunities where, especially if projected 2017-18 seasonal results haven’t

The tax reform bill signed into law December 2017 was materialized according to plan. But even if most of the wind-
historic, lowering the federal tax burden and creating a fall is earmarked for capital improvements or to expedite
windfall for businesses. Although controversial, the bill other initiatives, areas should consider applying at least some
affords businesses greater autonomy and control over portion of the tax windfall to help balance wage growth in
managing their enterprises within a free-market society, relation to economic growth. As we know, business is about
and is intended to spark investment, entrepreneurship, and more than profiteering, passing on savings to guests, cover-
corporate philanthropy. ing increased energy costs, new/renovated buildings, debt
For human resources, the bill is regarded as a long- repayment, and acquisitions. Our employees help make all of
needed catalyst to help realize greater prosperity for that possible.
workers—a closing of the decade-long wage gap that
should open opportunities for better earnings, more Tax Relief Induced Bonuses VS
jobs, and growth. At least for now, the bill drastically Sustainable Wage Growth
shifts ideology from heavy regulation aimed at forcibly Many US companies (more than 300 formally at the end
mandating wage increases to a balanced effort combining of January) have boldly announced how they are sharing
long-held legislation and free market systems, generally parts of these windfalls with employees. These “kickbacks”
led by private business. come in many forms, ranging from $15 per hour wages,
While the tax windfall is a boon to most businesses, to bonuses, to higher medical plan premium subsidies, to
including ski areas, it’s important to consider and manage 401(k) profit sharing (see figure 4)—all aimed at recogniz-
expectations about how the money will be used. A main ing the value these companies place on their employees.

32 | NSAA JOURNAL | SPRING 2018