Benefits & Compensation

Baker McKenzie’s annual Global Equity Academy is designed to provide stock administration, HR, legal, employment and tax professionals with a comprehensive training on the basics of global employee share plan offerings.

Our virtual series spans four 60-minute webinars, each followed by an optional 30-minute “study hall” for participants to ask additional questions of our presenters and discuss learnings

Given recent developments and trends in the United States relating to restricted covenants (especially non-competes), companies should take another look at any restrictive covenants included in equity award agreements.

To learn more about the possible approaches companies can take to deal with restrictive covenants for employees outside the United States, read our recent NASPP guest blog post.
Continue Reading Reevaluating Restrictive Covenants in Equity Award Agreements

As most California employers know by now, Senate Bill 1162 requires private employers of 100 or more employees (with at least one employee in California) to report pay and demographic data to the California Civil Rights Department (CRD) (formerly the Department of Fair Employment and Housing). Complicating matters, the law was amended to add a requirement to report data regarding workers hired through labor contractors.  

The deadline for submitting pay data reports is May 10. If you are having trouble gathering information from labor contractors, you are not alone. So, if it looks like you might be late on the labor contractor employee report, we recommend seeking an extension from CRD through the portal ASAP. The good news is that extensions are available, but only for the labor contractor reports, and only through the portal. (Link here.) Requests for an extension must be submitted on or before May 10.Continue Reading Last Call for Compliance: CRD Pay Reporting Deadline May 10, But Extensions Available

Special thanks to co-author, Jeff Bauman.

It is common practice for US-based multinational companies to adopt executive severance plans to provide for additional benefits to be paid to executives in the event of certain specified termination events, including those in connection with the change of control of the parent. These benefits may consist of

The New York City Council is already considering an expansion to the City’s pay transparency law to require NYC employers to include a description of non-salary or non-wage compensation in job postings. Dramatically increasing the burden on employers, the proposed ordinance would require a description of “bonuses, benefits, stocks, bonds, options and equity or ownership, if any.”

Background

As discussed here, New York City’s pay transparency law (Local Law 32 and its amendment), went into effect on November 1, 2022, and requires NYC employers with four or more employees to disclose in job postings – including those for promotion or transfer opportunities – the minimum and maximum salary offered for any position located within New York City. This range may extend from the lowest to the highest salary that the employer in good faith believes at the time of the posting it would pay for the advertised job, promotion, or transfer opportunity.

Update

On February 2, 2023, the Council introduced Int. No. 907, a local law to amend the administrative code of the city of New York, broadening the information that must be disclosed in job postings.Continue Reading Proposed Expansion of NYC’s Pay Transparency Law Includes Bonuses, Equity Awards and Other “Non-Wage Compensation”

Special thanks to Geoff Martin and Maria Piontkovska.

On March 3, 2023, the Criminal Division of the United States Department of Justice (“DOJ”) published details of a three year Pilot Program Regarding Compensation Incentives and Clawbacks (the “Compensation Pilot Program”). The Compensation Pilot Program is effective March 15, 2023 and from that date it will be applicable to all corporate criminal matters handled by the DOJ Criminal Division. At the same time, DOJ also updated its Evaluation of Corporate Compliance Programs guidance document to reflect the criteria introduced by the Compensation Pilot Program, among other updates.
 
Background and Objectives of the Compensation Pilot Program

The concept of incentivizing corporate compliance by structuring compensation programs to reward compliant behaviors and punish non-compliant ones, is nothing new. For example, prior editions of the Evaluation of Corporate Compliance Programs addressed appropriate incentives for company management and executives to promote good governance and compliance, and expectations about the consistent application of discipline against employees found to be involved in misconduct.

However, in a September 2022 memo to DOJ prosecutors titled: “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group“, Deputy Attorney General Lisa Monaco indicated that DOJ intended to go further on this particular topic. In the memo, Monaco indicated that DOJ would expect companies to design compensation structures not only to incentivize and reward good compliance practices, but also to financially penalize individual employees found to have been engaged in misconduct, including by clawing back compensation after the fact.

DOJ’s objective in this initiative is to encourage companies to redistribute some of the cost and penalties associated with individuals’ criminal conduct away from the company (and its shareholders) and onto the individuals themselves. Because misconduct is often discovered after the fact, measures that enable retroactive discipline and clawback of compensation already paid, are of particular importance to DOJ. These measures also reinforce DOJ’s continued focus on individual accountability which has been another of DOJ’s recent areas of focus in addressing corporate criminal matters.

Six months after Monaco’s memo, the Compensation Pilot Program now puts concrete DOJ policy in place to implement those objectives. At the end of the three year pilot period, DOJ will determine whether the Compensation Pilot Program will be extended or modified. If it is deemed a success, we can expect the Compensation Pilot Program to be fully adopted by DOJ. Continue Reading Practical Considerations When Addressing New DOJ Compensation Incentives and Clawbacks Program

Together we navigated operational challenges caused by the pandemic, and together we will weather this. What follows is information and practical advice for employers concerned with satisfying their payroll obligations in the near term in the face of their bank falling into receivership.

  • Identify the “universe” of employment-related expenses. This will include payroll, benefits, bonus and commission comp, insurance, and severance obligations.
  • Understand that liability for unpaid wages can be significant. For example, liability in California includes:
    • Back payment of any unpaid wage amounts that employees prove they were legally entitled to.
    • Interest of up to 10% of the unpaid wages.
    • Penalties for late payment of wages equal to: (i) $100 for the first violation; and (ii) for each subsequent violation, $200 plus 25% of the amount unlawfully withheld. Penalties may apply for each pay period that wages remain unpaid.
    • If any employees leave the company after the payday date, the company can be liable for waiting time penalties for late payment of final wages. Waiting time penalties are equal to 1 day’s wages for each day an employee’s final wages are unpaid, up to a maximum penalty of 30 days’ wages.
    • Companies may be required to pay employees’ attorney’s fees if the employees prevail in litigation.
    • Criminal liability for wage theft if the act is “intentional.” Felony cases are punishable by up to 3 years in prison.  

Continue Reading Navigating Fallout From a Bank Receivership | Practical Tips for US Employers

Studies are showing that around 98% of CEOs in the US and across the EU are preparing for a recession in the next 12-18 months.

With inflation increasing the cost of goods and certain services, some companies may find themselves in an immediate economic bind and needing to engage in cost-cutting methods to reorganize and

It is official.  California has joined Colorado, Washington and New York City in requiring job posting to include pay ranges. Today (September 27, 2022), Governor Newsom signed SB 1162 into law, requiring California employers with 15 or more employees to include the salary or hourly wage range of positions in job listings. SB 1162 also