Two Long Island banks are boosting workers’ pay because of the tax overhaul.
Empire National Bank is increasing salaries by 5 percent, upping its 401(k) match program and giving all nonexecutive employees one-time $1,000 bonuses as a result of the benefits derived from the recent federal tax overhaul.
“Two of the three benefit increases will be recurring in one way or another,” said Douglas C. Manditch, the bank’s chairman and chief executive. “We want to reward our employees, and we are very proud of their efforts in helping us achieve growth.”
He said salary increases were between 3 percent and 4 percent in previous years. Islandia-based Empire has 74 employees; 30 are nonexecutives, Manditch said.
Separately, Bridgehampton-based BNB Bank said it was increasing its minimum wage from $13 to $15 in light of the lower corporate tax rate. The bank added it was also increasing wages for employees in the tier above that.
About 100 employees, or 20 percent of the bank’s workforce, will see an increase, BNB said.
“Increasing their pay seemed more appropriate than a one-time check,” said Kevin O’Connor, chief executive at Bridge Bancorp, the bank’s parent company. “This is more permanent.”
An economist agreed that the banks’ salary increases are “more meaningful than a one-time, modest bonus . . . It allows for an ongoing new expenditure or debt reduction, and it also increases your base salary, which is positive for future percentage-based increases,” said Herman A. Berliner, an economist and dean of Hofstra University’s Frank G. Zarb School of Business.
Manditch said Empire’s increased benefits would cost the bank about $200,000.
Empire’s Monday announcement makes it the latest Long Island company to say it has granted a bonus after the tax bill was passed.
Last week, Flushing Financial Corp. said it paid nonexecutive full-time and part-time employees a one-time bonus of $1,000 and $500, respectively. The bonuses cost Uniondale-based-Flushing about $620,000.
Bohemia-based Dayton T. Brown Inc., an engineering and testing company, said in December it was giving each of its roughly 210 employees a $400 bonus.
AT&T, Boeing Co., Comcast and Sinclair Broadcast Group are among the large companies that have said they will pay employees bonuses because of the savings they expect from the tax overhaul.
Also, Manhattan-based banking giant JPMorgan Chase, citing improved economic performance and the changes to the U.S. tax code, said it is boosting wages, opening new branches and hiring thousands of new workers.
Manditch said he expected continued economic growth because of the new tax law.
“I believe we are seeing some growth already, and it’s helped with consumer and business confidence,” Manditch said.
Bonuses and salary increases will help companies retain employees, Berliner said.
“When the economy is red hot, people are more willing to take chances and change jobs,” Berliner said. “The bonuses and salary increases are relatively modest, and it serves a great purpose.”