Bonuses

News & Analysis as of

Washington Supreme Court Finds Employer’s Discretionary Bonus Not Unlawful “Rebate” Under Wage Rebate Act (“WRA”)

In a 5-4 decision, the Washington Supreme Court has ruled in an employer’s favor and clarified what are, and are not, statutory “wages” and unlawful wage “rebates” under Washington State’s Wage Rebate Act (“WRA”), RCW 49.52...more

"Banker Bonuses: UK and EU Remain on Collision Course"

Since 1 January 2014, the EU’s Capital Requirements Directive (CRD)1 has required EU-regulated banks (EU Banks) to limit variable compensation paid to key bank staff to 100 percent of their fixed compensation (or 200 percent...more

The EU Bonus Cap and Restrictions on the Use of Role Based Fixed Allowances

On 15 October 2014 the European Banking Authority (“EBA”) issued a report on the use of role-based fixed allowances by various financial institutions within the European Union (“EU”) affected by the EU bonus ratio cap....more

AB 2222 Restricts Use of State Density Bonus Law

On September 27, 2014, Governor Brown signed AB 2222, which amended sections of the State Density Bonus Law (Gov. Code §§ 65915, 65915.5 ["DBL"]). The main purpose of the bill is to require developers to replace all of a...more

Stock Incentive Plans may allow Texas Employers to Claw Back Non-vested Bonus Compensation from Employees that Leave and Work for...

As far as employee compensation agreements are concerned, Texas employers are riding a wave of pro-business precedent. The Supreme Court of Texas’ recent opinion in ExxonMobil Corporation v. Drennen continues the trend. ...more

Attract and Retain Top Talent When You Cannot Compete Straight Up on Cash

One of the biggest challenges that a business owner may face is attracting and retaining top talent to help drive value and build their company. There are a variety of employee incentive compensation tools that can be used to...more

"EU Debate on Enforcement of the 'Banker Bonus Cap' Approaches End Game"

Michel Barnier, vice president of the European Commission, recently wrote to the chairman of the European Banking Authority (the EBA), asking the EBA to report by the end of this month on whether allowances paid by EU banks...more

Combination Bonus and Deferral Plan Subject to ERISA

The Fifth Circuit Court of Appeals held that a deferred compensation plan through which key employees received annual bonuses and were able to defer both bonuses and other income was an “employee pension benefit plan”...more

Quirky Question #233, The Regular Rate: Where Math and Law Collide

Question: We operate a warehouse in Minnesota where the employees work two weeks on / two weeks off. They work 10 hours per day, 7 days per week when they’re on at an hourly rate of $30. The employees also ordinarily...more

FINRA Withdraws Bonus Disclosure Rule

On Friday, June 20, 2014, the Financial Industry Regulatory Authority (“FINRA”) withdrew its proposed Rule 2243, which would have required disclosure and reporting of FINRA member recruiting practices. Essentially, the rule...more

Ignoring the Bonus True-Up: How a Seemingly Small Oversight Can Lead to Complex Litigation

As many employers recognize, a seemingly small oversight in administering employee payroll can have significant consequences, including unexpected complex litigation. One such oversight is failing to consider the wage-hour...more

FINRA Moves Forward With Proposed Rule Requiring Disclosure Of Recruitment Bonuses

FINRA has submitted a proposal to the SEC to adopt FINRA Rule 2243 (Disclosure and Reporting Obligations Related to Recruitment Practices). In FINRA’s words, Rule 2243 would require, in some cases, “specific disclosure by...more

Employment Law 101: Bonuses

What counts as a bonus: There are a lot of ways to describe a bonus. For our purposes, a bonus includes any discretionary or non-discretionary payment or “compensation” to an employee outside of their regular hourly, salary,...more

Employment Law Advisory for February 13, 2014: Avoid Common Mistakes When Creating Commission and Bonus Plans

Commissions or bonuses represent a significant component of the compensation packages of many employees. As of January 1, 2013, California Labor Code section 2751 requires commission agreements to be set forth in writing, and...more

MCOs Terminating Providers and Restricting the Freedom of Choice of Providers for Medicaid Recipients: Going To Far?

Who remembers Dennis Kozlowski? He is the former CEO of Tyco International, and his net worth is estimated at $600 million. However, his residence? A mansion? On his own island? Nope. He is currently serving 8.33 to...more

Finders Are Not Always Keepers!

Your good client, Avery Phillips, Chairman of the Board, calls you because he is considering engaging a friend, Tepper, to identify potential investors for his company. Phillips explains that Tepper has extensive business...more

Health Law Blog: Court's Decision Another Reminder to Hospitals To Use Caution in Calculating Physician Productivity Bonuses

November, a federal district court granted partial summary judgment for the Department of Justice in U.S. ex. Rel. Baklid-Kunz v. Halifax Medical Center, ruling that productivity bonuses paid to employed physicians violated...more

Cap on Bankers’ Bonuses: More Guidance Issued

European Banking Authority publishes regulatory technical standards for the identification of “material risk takers”, reducing the potential impact of the new rules on bonus caps....more

Contingencies on Employee Bonuses Delay Employer’s Tax Deduction According to IRS Chief Counsel Memo

An employer cannot deduct cash bonuses in the year in which its employees perform the services giving rise to the bonuses, but must wait until the following year when the bonuses are paid, under bonus plans with several...more

Avoiding Mistletoe Mishaps, Part VII: Bonuses Have You Saying “What the Dickens?” Lessons To Learn From Ebenezer Scrooge

As 2013 comes to an end, we have been considering a number of workplace issues that employers might face at the end of the year and the beginning of the holiday season. Part seven of our series discusses the wage and hour and...more

Kaye Scholer’s clients need to check their bills

Another law firm has motivated its associates to spend more time rather than less getting their work done. Kaye Scholer is paying upwards of $20,000 in additional bonuses to those who exceed 2,200 hours per year. The firm’s...more

How and When Bonuses are Awarded Impact Non-Exempt Employees' Overtime Compensation

Does your company pay employees holiday or year-end bonuses? Have you ever considered the impact these bonus payments might have on your employees' overtime premiums? If not, you could be violating FLSA rules....more

Tis The Season To Avoid Wage and Hour Pitfalls With Holidays and Bonuses

As the end of the year and year-end holiday season approach, so do annual bonus time and paid holidays. Employers should avoid some common wage and hour pitfalls with bonuses and paid holidays. The first common pitfall is not...more

False Claims Act Litigation Update: Florida Federal Court Finds Hospital Violated Stark Law Via Oncologist Bonus Compensation...

On November 13, 2013, the United States District Court for the Middle District of Florida granted partial summary judgment in favor of the United States inUnited States ex rel. Baklid-Kunz v. Halifax Hospital Med. Ctr., et...more

Too Much Discretion With Respect To Annual Bonuses May Cause Deferral Of The Employer’s Deduction

In an IRS Field Attorney Advice Memorandum (FAA 20134301F) dated September 18, 2013, the IRS Office of Chief Counsel reviewed several common bonus plan designs in connection with a request for an opinion with regard to the...more

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