DOL Issues Final Rule Permitting Use of Non-Salary Compensation under ‘Fluctuating Workweek’ Pay Method

On May 20, 2020, the U.S. Department of Labor (DOL) issued a Final Rule expressly permitting employers to provide additional pay, such as bonuses, commissions, or premiums, to employees when utilizing the “fluctuating workweek” (FWW) pay method under the Fair Labor Standards Act (FLSA), without jeopardizing the use of that pay method. READ MORE

Reassessing Executive Compensation and Benefits in Tax-Exempt Organizations as the COVID-19 Crisis Deepens

Hospitals, health systems and other tax-exempt organizations are responding to a longer and deeper economic crisis by making or considering significant changes to their executive compensation and executive benefit programs. The economic crisis, and these executive compensation and benefit changes, have far-reaching implications for the ongoing work of the board’s compensation committee. We want to provide this review of what we see happening “on the ground” as the crisis continues. READ MORE

Reducing Salaries of Exempt Employees under the FLSA

As daily headlines have shown, the economic fallout from the COVID-19 pandemic has led businesses of all types to announce dramatic changes in workforce levels and employee pay. Many of these companies have made the decision to reduce the salaries they pay to their exempt employees. These reductions, which often range from 10 percent to 30 percent, have affected executives, managers, and professionals. On the positive side, salary reductions give employers an option for reducing labor costs that preserves more jobs and mitigates the loss of skilled employees. READ MORE

Companies Are Quietly Pulling the Plug on “Hero Pay” for Essential Workers

The coronavirus pandemic has highlighted a major modern contradiction—many "essential" workers, the ones whose jobs are too important to shut down, are the ones making the least money. Meat processing, for example, is a job that pays poorly and is riddled with danger. And yet it's been deemed so important that Donald Trump used the Defense Production Act to order that plants stay open. READ MORE

The Pandemic's Impact on Compensation and Benefits

Disruption in business operations by the pandemic has increased the need for employers to focus on compensation and employee benefits. Developing a comprehensive business response will involve benefits plans and more broadly the compensation philosophy employers will adopt. The CARES Act provided some additional flexibility, but this entire area is otherwise heavily regulated, and any contemplated change should be approached with caution. READ MORE

Employee Stock Compensation Plans and Market Downturns

There’s a lot of talk going around about a nasty stock market drop and coming recession. Even though the market seems to be less volatile at this point, many market watchers warn there could be a reckoning, especially if we see another wave of COVID-19 infections. The economic implications of even our relatively brief shutdown are also likely to have an impact for at least the next few earnings cycles. READ MORE

Does It Make Sense to Consider a Secular Trust for Deferred Compensation

The purpose of this Post is to highlight the question of whether, in today’s economic environment, deferred compensation monies should be secured with a secular trust.  This Post is Part 7 of a 7-Part series addressing compensation adjustments that Compensation Committees could consider in order to continue to incent and retain their executive officers in today’s economy. READ MORE