Federal Tax Laws: Consider IRC Section 409A (deferred compensation), IRS regulations on bonus compensation taxation, and FICA/Medicare tax implications
FLSA Compliance: Ensure agreement complies with Fair Labor Standards Act requirements regarding compensation and overtime considerations
Non-Discrimination Laws: Compliance with Title VII of Civil Rights Act, Equal Pay Act, and Age Discrimination in Employment Act to ensure bonus criteria are non-discriminatory
State Employment Laws: Consider applicable state-specific wage and hour laws, tax regulations, and employment regulations that may affect bonus arrangements
ERISA Considerations: Evaluate if the bonus arrangement falls under Employee Retirement Income Security Act regulations as part of a broader benefits plan
Contract Law Fundamentals: Ensure agreement includes essential contract elements: consideration, offer and acceptance, clear terms, and capacity to contract
Corporate Governance: Consider SEC regulations, company bylaws, and any required board approvals for bonus arrangements
Eligibility Criteria: Clear definition of who qualifies for the retention bonus and under what conditions
Payment Structure: Detailed specifications of bonus amount, payment timing, and conditions for payment
Protective Provisions: Include clawback provisions, termination clauses, confidentiality requirements, and any non-compete/non-solicitation terms
Dispute Resolution: Specify procedures for handling disputes and applicable jurisdiction/venue
Tax Treatment: Clear explanation of tax implications and withholding requirements for the bonus payment
Integration Clause: Provisions regarding how the bonus agreement integrates with existing employment agreements and company policies
