Bonuses

News & Analysis as of

Germany: Court Holds Payment and Amount of Discretionary Bonuses are Subject to Judicial Review

On August 3, 2016, Germany's Federal Labor Court ruled that while the payment of employee bonuses and their amounts are at the discretion of the employer, they are subject to full judicial review. Under this reinterpretation...more

Legal interpretation and application of year-end bonuses under Chinese law

The term “year-end bonus” generally refers to the material incentive a company gives to its employees to reward them for their good performance and contribution to its development. With continuous economic growth a goal of...more

Resource for Companies Evaluating Compliance with New Overtime Laws

Many companies are in the process of completing internal audits to prepare for the new salary and overtime rules that go into effect on December 1, 2016. While the changes do not impact the duties-portion of FLSA exemptions,...more

Non-Discretionary Bonuses and Overtime Pay Calculations

More employees than ever may be categorized as non-exempt when the new Department of Labor (“DOL”) salary requirement for exempt employees becomes effective on December 1, 2016. Many formerly salaried, exempt employees will...more

100 Days Until the New Overtime Rule Takes Effect: Is Your Company Ready?

On December 1, 2016, the annual cost of classifying most executive, administrative, or professional employees as “exempt” from the overtime rules more than doubles ($23,660 to $47,476). Is your company ready for this change?...more

Double Check those Bonus Plans!

The Ontario Court of Appeal’s decision in the case of Paquette v. TeraGo Networks Inc. should have all employers running to double-check and possibly amend their bonus plans.  A further case released on the same day by the...more

Tadjudin Sunny vs. Bank of America National Association - implied term of anti-avoidance

In 2007, the Bank terminated an Analyst in its Distressed Debt Trading Group by payment in lieu of notice, following completion of a Performance Improvement Plan (PIP). She was not awarded any bonus on her departure. The...more

Three Blockbuster Summer Arbitration Decisions

While regular people count down the days to summer blockbusters that come in the form of high-paid actors fighting aliens or robots, I prefer my summer blockbusters in the form of arbitration opinions that have been months in...more

German Statutory Minimum Wage May Include Vacation and Christmas Bonuses

On May 25, 2016, the German Federal Labor Court confirmed a decision of the State Labor Court Berlin-Brandenburg (reference number: 5 AZR 135/16) regarding the statutory minimum wage in Germany. The German Federal Labor...more

North Carolina Supreme Court Denies Employee's Claim to Patent Ownership Based on Pay Dispute with Employer

Under the “hired to invent” doctrine, employees who develop intellectual property during the course of their employment generally have no ownership rights to such innovations. Earlier this month, the North Carolina Supreme...more

Understanding the Final Overtime Rule: Is it really that Simple?

According to the U.S. Department of Labor (DOL), the Final Overtime Rule, which is effective on December 1, 2016, simplifies the regulations to make them easier for employees and employers to understand and apply. Really? ...more

What Bonuses and Incentive Payments Count As "Discretionary" Under The New Exemption Rules?

One of the more surprising changes in the new FLSA overtime exemption rules is a provision allowing  certain bonuses, commissions, and incentive pay to count for up to 10% of the new increased minimum salary level. However,...more

Handling Nondiscretionary Incentive Payments Under the New FLSA Overtime Rule

One of the few “wins” for employers under the DOL’s new overtime rule was that employers are now allowed to apply “nondiscretionary incentive payments” to meet up to 10 percent of the new salary threshold. This change could...more

Are You Still Reimbursing Premiums For Your Employee's Individual Healthcare Insurance? Then You'd Better Read This!!

In the past, many employers (especially smaller companies) have offered to pay their employees’ premiums for individual healthcare insurance instead of sponsoring their own group health plans. With the advent of the...more

The Wait Is Over – The New Overtime Rules Are Here: The Reconfiguration of Your Compensation System Is Just Beginning

The good news is the long awaited rule on overtime has arrived – finally. The proposed rule goes into effect on December 1, 2016. The quick summary is the changes aren’t quite as bad as everyone feared. The long summary is...more

California Supreme Court Puts Federal Bonus OT Formula in Doubt

Seyfarth Synopsis: The Court of Appeal decision that held that employers may use the federal formula for calculating overtime on a flat sum bonus is no longer citable precedent as the California Supreme Court has granted...more

Bonus Points: ARB Upholds Whistleblower Order Challenging Bonus Plan

The Department of Labor’s Administrative Review Board (“ARB”) recently upheld an order finding a semiconductor company had constructively discharged a manager who complained the company’s bonus plan violated state wage and...more

Tom Brady’s suspension reinstated, so what are the potential Massachusetts tax consequences?

Deflategate and the NFL’s suspension of quarterback Tom Brady for 4 games has been the NFL’s biggest news story of the past two years. On April 25, 2016, the United States Court of Appeals for the Second Circuit ruled in...more

Is Your Corporation “Zeroing Out” Income at End of Year Through Bonuses? Watch Out!

For the last few years the IRS has warned taxpayers that it would look closely at year-end bonuses that resulted in “zeroing out” taxable income of a corporation by deducting the bonuses as salary rather than a payment of...more

Disclaimer in Top-Hat Plan Could Save Millions for Employer

Do you have a top-hat plan? That’s a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees...more

California Employment Law Notes - March 2016

Nuclear Plant Maintenance Manager's Whistleblower Claim Was Properly Dismissed - Sanders v. Energy Northwest, 2016 WL 560809 (9th Cir. 2016) - David W. Sanders, a maintenance manager for Energy Northwest (a...more

Corporate and Financial Weekly Digest - Volume XI, Issue 9

SEC/CORPORATE - SEC Chair Addresses Advisory Committee on Small and Emerging Companies - On February 25, Securities and Exchange Commission Chair Mary Jo White addressed members of the SEC’s Advisory Committee on...more

Federal Law Applies in Calculating Overtime on Flat Sum Bonuses

Paying employees a bonus may trigger the obligation to pay retroactive overtime. The good news is that Alvarado v. Dart Container Corporation of California clarifies that it is lawful for California employers to use the...more

California Court Approves FLSA Formula For Flat Bonuses

The California Court of Appeal provided employers with a small New Year’s gift for 2016: on January 14, in Alvarado v. Dart Container Corporation of California, it affirmed that an employer’s formula for calculating overtime,...more

Federal Formula for Calculating Bonus Overtime Lawful in California

Seyfarth Synopsis In A Second: A California employer can use the federal formula for calculating overtime on a flat sum bonus, even though the California Division of Labor Standards Enforcement Manual states otherwise....more

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