Severance Pay

News & Analysis as of

Two New SEC Orders Further Limit Employers' Ability to Secure Employee Releases and the Breadth of Confidentiality Agreements

The Securities and Exchange Commission (SEC) has issued two orders challenging employee confidentiality agreements and indicating that companies must not condition employees’ receipt of severance payments and other...more

Legal updates regarding Israeli law - Significant recent case law: employer ordered to provide prior notice to employees in a...

Employment Appeal 28597-03-11 Dabush Light – Jordanian Locks Holdings (2005) Limited. Decided on February 11, 2015. Jordanian Locks transferred the ownership of its plant to another company. The employees continued to...more

Changes to tax treatment of termination payments

The UK Government has announced changes to the tax treatment of termination payments following the conclusion of its recent consultation. Draft legislation has now been published which will come into force in April 2018....more

Wilson: SCC Overhauls Standard of Review?

Tax professionals who advise clients on judicial review of the CRA’s discretionary decisions should monitor developments in the standard of review in light of the Supreme Court of Canada’s decision in Wilson v Atomic Energy...more

How should employers deal with pensions in a severance package?

HR professionals often ask us how to deal with pension issues when they structure severance packages for non-union employees. Should employees continue to earn pension benefits after termination of employment?  If so, for how...more

Canada Labour Code Clarified: Supreme Court Rules That Non-Unionized Employees Can Only Be Dismissed with Cause

At common law, a non-unionized employee may be dismissed without cause or reasons if he or she is given reasonable notice of termination or pay in lieu. However, for non-unionized federal employees, the Supreme Court of...more

New Proposed Regulations for Section 457(f) Nonqualified Deferred Compensation Arrangements of Non-Profit and Governmental...

The Internal Revenue Service recently released long anticipated proposed regulations (the “Proposed Regulations”) governing deferred compensation arrangements maintained by tax-exempt organizations and governmental entities...more

Employee Benefits Developments - July 2016

Section 409A of the Internal Revenue Code (“Section 409A”) generally provides that, if a plan providing for deferred compensation fails to comply with Section 409A, either in form or in operation, then all amounts deferred...more

Top 10 rules for compliant non-qualified deferred compensation

By Lori Jones Internal Revenue Code Section 409A regulates nonqualified deferred compensation (NQDC) plans and arrangements, which are commonly used to provide supplemental compensation to key executives. Complying with...more

Does Your Severance Trigger ERISA? Why You Should Care and What You Should Do

Generally speaking, many employers do not think about the Employee Retirement Income Security Act (ERISA) when it comes to severance, whether at the front end, when employment agreements or policies are negotiated and...more

The Proposed Code Section 457 Regulations Have Arrived

On June 22, 2016, the IRS finally issued the long-awaited proposed regulations under Internal Revenue Code (“Code”) Section 457. Code Section 457 applies to deferred compensation plans or arrangements of tax-exempt entities...more

Proposed Section 409A Regulations Would Clarify Separation from Service Analysis in Connection with Change in Status From Employee...

Pursuant to the final regulations under Section 409A of the Internal Revenue Code of 1986, as amended, a termination of employment generally occurs at such time as the employer and employee reasonably anticipate that the...more

Cautionary Observations from the Proposed 457 Regulations

After more than nine years of deliberations, the IRS has finally released proposed regulations governing all types of deferred compensation plans maintained by non-profit organizations and governmental entities. In...more

Sale of a Business is Not Constructive Dismissal

In the decision 2108805 Ontario Inc. v. Boulad rendered on January 25, 2016, the Quebec Court of Appeal overruled the trial judge who had considered that the change of employer resulting from a change of ownership constituted...more

Good News! New 409A Regulations (Yes, Really!) – Part 1: Firing Squad

On the TV show Futurama, the aged proprietor of the delivery company Planet Express, Professor Hubert J. Farnsworth, had a habit of entering a room where the other characters were gathered and sharing his trademark line,...more

IRS Issues Proposed Regulations Under Code Section 457 Affecting Deferred Compensation Plans of Tax-Exempt Organizations

The Internal Revenue Service recently issued proposed regulations under Section 457 of the Internal Revenue Code (the “Code”) that prescribe rules regarding deferred compensation plans sponsored by state and local governments...more

Mass Terminations—What Ontario Employers Need to Think About When Restructuring or Reducing Their Workforces

When discharging employees, it pays to be prepared. This is especially so when an employer is considering a large-scale restructuring....more

IRS Issues Proposed Regulations on Nonqualified Deferred Compensation Arrangements for Governmental and Tax-Exempt Entities

The Treasury Department last week issued long-awaited proposed regulations under Section 457(f) of the Internal Revenue Code regarding nonqualified deferred compensation arrangements sponsored by governmental and tax-exempt...more

IRS Provides New 409A Guidance; New Proposed Regulations Provide Additional Clarity, Warn of Abusive Practices, and Present...

In Depth - Additional flexibility to use Section 409A exemptions - ..Expanded availability of the rules for transaction-based compensation for stock rights and incentive stock options. The final regulations allow...more

IRS Issues Regulations Affecting Compensation Arrangements at Tax-Exempt Organizations

On June 21, the IRS issued long awaited proposed regulations under Section 457 of the Internal Revenue Code that affect a broad range of compensation arrangements at tax exempt organizations. If a compensation arrangement is...more

Under the Dome Special Edition: 2016 Summary of New Maine Laws

We are pleased to share our 2016 Summary of New Maine Laws enacted during the Second Regular Session of Maine's 127th Legislature, which adjourned sine die April 29, 2016. We provide you this summary to help you stay...more

A Quick Guide to the Taxation of Retiring Allowances

When an employee’s employment is terminated without cause, the employee will typically receive some form of a termination/severance payment. All or part of this termination/severance payment may be considered a “retiring...more

Surviving the Strife: How Start-Up Founders Can Ensure That Inevitable Friction and Departures Won't Sink the Company

History is all too often repeated when start-up founders fail to plan for when (not if) they don’t see eye-to-eye. Relationship breakdowns and messy founder departures are common root causes of start-up failures. Common...more

What GCs Need to Know About Reductions in Force

Reductions in force (“RIFs”) are group terminations, usually driven by the financial condition or business needs of the employer. An employer’s General Counsel, even though responsible for protecting the employer from legal...more

Fixed-term Employment Agreements: Draft Them Carefully

Employers often use fixed-term employment agreements to limit their future severance costs owed to employees. Although that may be an effective approach in theory, the Ontario Court of Appeal’s recent decision in Howard v....more

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