Bonuses

News & Analysis as of

Does Your Wife Deserve A Bonus?

Does a wife deserve a monetary “bonus” for exemplary skills in housekeeping and child rearing? In some social circles, this is actually occurring. In fact, the trend was explored recently in a New York Times Op Ed piece,...more

IRS Limits Correction Opportunities under Section 409A Proposed Income Inclusion Regulations and Imposes 20% Penalty

In Chief Counsel Advice 201518013 (May 1, 2015) (the "CCA"), the IRS addresses an executive retention bonus that originally vested after three years and was payable in equal installments on the first two anniversaries of the...more

IRS Rules Retention Arrangement Violates 409A

In a Chief Counsel Memorandum issued last month, the IRS concluded that an executive retention arrangement violated Section 409A despite the employer’s efforts to correct the arrangement before the retention bonus vested....more

Does Your Retention Bonus Plan Violate IRS Code?

In a memorandum released earlier this month, the IRS Office of Chief Counsel ruled that a retention bonus payable to an executive violated Section 409A of the Internal Revenue Code ("409A"). The IRS further ruled that the...more

Illinois Appellate Court Limits Employer's Discretion To Award Or Deny Bonuses Under Written Bonus Plan

McCleary v. Wells Fargo Securities, LLC, an Illinois Appellate Court held that a former employee stated a claim for an unpaid bonus under a written bonus plan that expressly stated that bonuses were made at the sole...more

Case Alert: Failure to Pay Bonus to Disabled Employee Was Discrimination

What happened? In the recent case of Land Registry v Houghton the Employment Appeal Tribunal (EAT) ruled that an employer had discriminated against disabled employees by operating a bonus scheme which disqualified employees...more

Some Thoughts on Employee Appreciation Day, including a Potential Wage and Hour Pitfall

“And you’re wondering . . . am I appreciated . . . I’m not really appreciated, should I play like I’m appreciated, but I’m not that appreciated . . .but I think my employer might appreciate me . . . but do I want to be...more

SEC "Claws Back" Bonuses and Stock Sale Profits From CFOs of Public Company Charged With Accounting Fraud

On February 10, 2015, the SEC announced settlements with two former chief financial officers of Saba Software, a Silicon Valley software company, that require the CFOs to repay Saba more than $500,000 in bonuses and profits...more

GLOBAL: Lance Armstrong to pay US$10 million to SCA Promotions

On 4 February 2015, an arbitration panel (in a 2-1 decision) ordered Lance Armstrong to pay US$10 million to SCA Promotions (SCA), a sports insurance company, for US$12 million worth of bonuses received for his seven Tour de...more

FMLA FAQ: Is An Employer Required to Pay a Prorated Amount of Annual Bonus after Employee Takes FMLA Leave?

It’s the end of the year. And with the end of the year comes questions from my clients about whether they need to account for an employee’s FMLA leave when doling out year-end bonuses. In other words, is an employer...more

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

Don’t Let a “Bonus” Become a “Wage” (Under the MA Wage Act)

As I have previously warned in prior blog, the Massachusetts Wage Act exposes a company and individuals having management responsibility for the company to mandatory treble damages and attorneys’ fees for failing to pay...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

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