Steven Friedman Explains Effects of Obama's Cap on Executive Salaries
"How Obama's Cap on Exec Salaries Could Cause as Many Problems as it Solves," The National Law Journal
"How Obama's Cap on Exec Salaries Could Cause as Many Problems as it Solves," The National Law Journal
Philadelphia, PA/ March 20, 2009 -- Littler Mendelson (Littler), the nation's largest employment and labor law firm representing management, is pleased to announce the arrival of shareholders Warren E. Fusfeld and Melissa B. Kurtzman to the firm’s Philadelphia office, both formerly of WolfBlock LLP.
The focus of this 2011 Littler Report is to provide employers with information to prepare and plan for regulations recently passed and those currently making their way through the agency rulemaking process. Part One of this Littler Report will set the stage and define the challenge employers will face in the coming years as the Obama Administration enters the second half of its term.
Section 162(m) of the Internal Revenue Code (the "Code") generally limits the deductibility of compensation paid by a publicly traded corporation to its top executive officers (the "covered employees") to $1 million annually (the "Million Dollar Cap"). However, this limit will not apply to certain amounts that qualify as "performance-based compensation." Compensation attributable to stock options, stock appreciation rights ("SARs") and restricted stock grants may qualify as performance-based compensation if they meet certain requirements.
The Virginia Supreme Court has spoken again on the calculation of damages in a complex employment contract case. In Online Resources Corp. v. Lawlor, No. 120208 (Va. Jan. 10, 2013), the court addressed the expert qualifications required for the valuation of equity following the termination of the chairman and chief executive officer (CEO) ("executive") of a publicly-traded company, as well as the applicability of Delaware Corporations Law to related change in control (CIC) provisions.
Background
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 and tax-exempt organizations. These regulations relate primarily to the taxes imposed (under Code Section 457(f)) on the organization at the time the individual’s right to compensation vests, without regard to actual time of payment.
Canada saw significant developments in labour and employment law in 2019. As we embark on a new decade, we will undoubtedly see the landscape in this ever-changing area of law continue to evolve. Here is our Littler LLP overview of 15 key developments in 2019 with links to more detailed articles and commentary:
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In a reassuring decision for employers, the UK High Court has confirmed that an employer’s use of a contractual provision to claw back an employee’s bonus was lawful. The ruling in Steel v Spencer Road LLP provides helpful guidance on the circumstances in which a bonus clawback will not constitute a restraint of trade, though employers should be mindful that not all such provisions will be enforceable.
Johane Severin discusses the growing practice of “stay-or-pay” contracts, which some argue force workers to pay if they resign ahead of a stipulated date.
International Employment Lawyer
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Alexander MacDonald weighs in on the effects of U.S. DOL regulations that seek to expand organizing protections for farmworkers on temporary visas.
Bloomberg Law
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Alexander Thomas MacDonald provides insight into the new regulations under theH-2A visa program.
The Federalist Society
The U.S. Department of Labor (DOL) published its new immigration-related fines/penalties, effective January 15, 2024. Immigration-related violations before the DOL involve these visas: H-1B, H-2A, and H-2B. These increases are pursuant to the Federal Civil Penalties Inflation Adjustment Act of 2015. Since that time, penalties have been adjusted yearly based on the rate of inflation.
Below are the offenses, including regulation citations, with the old and new penalties:
The Department of Homeland Security (DHS) has recently announced a streamlined process for foreign workers to request deferred action. Deferred action is a type of prosecutorial discretion to defer removal action (deportation) for a noncitizen for a certain time period. The new process will apply where these workers are participating in or otherwise involved an investigation or enforcement action by a federal, state, or local labor and employment agency.
As required under the Federal Civil Penalties Inflation Adjustment Act of 2015, the Department of Justice (DOJ) announced, through the Federal Register, increases for penalties under the Immigration Reform & Control Act (IRCA), effective February 13, 2024. Interestingly, the Federal Register announcement for DOJ increases also included penalties for sections of IRCA administered by the Department of Homeland Security (DHS), Immigration & Customs Enforcement (ICE).
In February 2024, Poland’s government revealed that it is working on a comprehensive migration strategy for the years 2025-2030, advertised as a “responsible and safe” approach. The Ministry of Interior and Administration plans to spend the first half of 2024 conducting consultations to learn the preferences and expectations on migration and foreigners’ employment from various stakeholders, including the country’s biggest employers and their organizations, as well the trade unions.
UPDATE: Since publication, we made a clarifying edit concerning the reasons an employee will be able to use paid sick leave under the amended law.
The Washington state legislature and certain localities recently passed several bills affecting employers, some of which have already been signed into law. These measures address non-compete agreements, mandatory employer-sponsored meetings, immigration reporting, paid leave, and the minimum wage. Each new bill or ordinance is discussed below.
New Law Expands and Clarifies Non-Compete Statute
Stephan Swinkels and Michael Lotito discuss the intersection of employment and geopolitics and offer key considerations for the C-suite of global companies.
Chief Executive
On August 9, 2024, Illinois Governor JB Pritzker signed Senate Bill 0508 (“SB0508”) into law. This new law provides additional employment protections for individuals flagged by an employment eligibility verification system, including federal E-Verify, as having identification discrepancies. The new rights and protections created by SB0508 will take effect on January 1, 2025. This evaluation does not address whether the state law directly restricts or curtails the use of E Verify.
Under the previous UK Home Secretary, James Cleverly, minimum salary thresholds for Skilled Worker visas were raised significantly and the 20% discount for shortage occupations were eliminated.
Both the Conservative and Labour manifestos vowed to lower immigration each year, leaving employers wondering what changes are on the horizon.
Review of IT and engineering roles
Michael Lotito said labor policy changes could be delayed in a second Trump administration depending on the shifting makeup at the NLRB.
Law360 Employment Authority
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The past year has brought sweeping changes to the world of work. Federal agencies finalized rules on minimum wage and overtime exemptions, union representation elections, pregnancy accommodations, OSHA inspections, and non-compete agreements. The Supreme Court scaled back agency rulemaking authority and lowered the bar for bringing discrimination claims. State legislatures expanded the patchwork of employment laws on a host of workplace topics. Meanwhile, the looming presidential election adds another layer of uncertainty to the mix.
Alexander Thomas MacDonald explains how, through a century of trial and error, labor law has been wildly successful in giving us the most peaceful labor market in history.
The Federalist Society
Michael Lotito says captive audience meeting bans passed by more than half a dozen states are “intrusive” and “against fundamental First Amendment principles.”
Bloomberg Law
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Alexander T. MacDonald says predistributional labor policies do none of the things they’re supposed to do and, in fact, amplify the problems they’re supposed to solve.
The Federalist Society
Joy Rosenquist talks about some of the 30 new California laws she thinks are particularly significant for employers, including rules addressing pay transparency and off-duty cannabis use.
Law360 Employment Authority
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Terri M. Solomon talks about Littler’s 2023 Employer Pulse Survey results, which show that employers are rebounding from 2020 as consumer spending on entertainment, travel and sports increases.
Law360 Employment Authority
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Jeff Nowak and Rich Falcone talk through a hypothetical HR dilemma involving a workplace complaint.
SHRM Online
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Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.
Download full Q1 2023 Global Guide Quarterly
New Legislation Enacted
Authors: Dennis Veldhuizen, Partner, and Eric van Dam, Partner – Clint | Littler
In this article, we share a round-up of the key developments from a regulatory perspective for HR Professionals in UK financial services firms. This covers expected changes to the SMCR regime, regulatory remuneration requirements and whistleblowing framework. We also look at the increasing focus of the regulator on culture and conduct within financial services firms in the wake of recent sexual harassment allegations within a UK asset manager.
SMCR
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A recent District of Columbia federal court ruling reminds employers that a severance agreement containing a release of claims under the False Claims Act does not guarantee dismissal of a suit on those grounds.
Background on the FCA
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Zoe Argento talks about the two main types of valuable and sensitive information that employees typically steal and offers ways employers can prevent workplace theft.
SHRM Online
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This Littler Lightbulb highlights some of the more significant employment law developments at the U.S. Supreme Court and federal courts of appeal in the last month.
At the Supreme Court
Meredith Shoop talks about the Affirmative Action Program Verification Interface where covered federal contractors can upload their affirmative action plans for review.
Government Executive
On August 19, 2022, OFCCP published a notice in the Federal Register for the stated purpose of advising employers that in response to a Freedom of Information Act (FOIA) request, it is planning to produce confidential information that is protected from disclosure pursuant to a statutory exemption.