The draft UK Finance Bill 2017 (the “Bill”) proposes some significant changes to the tax treatment of a payment in lieu of notice (“PILON”) for employees. Where a UK employer exercises a contractual right to make a PILON, the payment is fully taxable and subject to national insurance contributions (“NICs”) as income, in the same
Learning to Live with Clawbacks: The New, Long String on Executive Compensation
Existing rules in Europe require, and proposed rules in the U.S. would require, companies and financial institutions to have in place effective clawback policies. Under such policies, employers have the ability to recover compensation paid to employees when certain events occur or information comes to light that could have an adverse effect on the employer. The aim, of course, is to create a direct link between reward and conduct so as to promote good corporate behavior and ensure effective risk management.
Clawback provisions have been around for a number of years and they are now a fairly well-known feature in a variety of different bonus and equity incentive programs. They often complement other measures that employers can deploy to address adverse events and circumstances, the most common of which is the ability to forfeit or downward adjust unvested compensation. With executive scrutiny and accountability on the rise, the significance of these policies and their effectiveness will undoubtedly be put to the test. This article looks briefly at the legal and practical challenges companies face at each stage of a clawback policy – from design and implementation to operation and enforcement.…
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Employees in France and Germany May No Longer Have to Respond to Work-Related Emails Out of Working Hours
As people head off on their summer breaks, regulators in Europe, particularly Germany, are increasingly focused on the breakdown of the division between home and work life and how this division is changing as mobile devices become used for work-related emails. Regulators are considering new rules that would limit an employer’s ability to require employees…
Vodafone Announces Progressive Global Maternity Policy, Touching on Two Hot Topics in Employee Benefits
By Helena Milner-Smith, Kamakshi Venkataramanan and Jenna Wallace
Vodafone announced recently a new progressive and generous mandatory minimum global maternity policy. According to the company, under the new policy, to be in effect by the end of this year, female employees of Vodafone in 30 countries will be offered two maternity benefits: (1) at least 16 weeks of maternity leave at full pay, and (2) the opportunity to work a 30-hour week at full pay for the first 6 months after they return to work from leave.…
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Reduced Risk for International Companies Operating In France: Potential Removal Of Severe Sanctions For Failure to Consult with Works Councils
We are writing with another update on French labor law that could impact international corporate transactions. French President Francois Hollande has proposed a change to French legislation that could remove the threat of imprisonment for directors and senior employees who are found to have breached obligations to consult with works councils and other employee representatives. The implications of this change would be important for businesses in France, and also for international companies involved in mergers, acquisitions and divestitures in France.
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A Trap for the Unwary in International Acquisitions: New Information Rights for Employees Prior to Sale of Company in France
By: Chris Bracebridge, Luciana Griebel, Helena Milner-Smith, and Jenna Wallace
A French law that comes into force on November 1, 2014 will give employees new rights to be informed prior to the sale of a small or medium-sized company, thereby allowing them the opportunity to make an offer to purchase the company. Companies that meet certain threshold requirements (details below) will be required to inform staff of the owner’s intent to sell either the business or shares or securities giving access to the majority of the company’s capital. Failure to comply with the new law may lead to a substantial fine and could even result in the sale being nullified by a court order. The implications of this law are important for business owners in France and also for international companies considering acquisitions in France.
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