United States: WEB EXCLUSIVE: Start Planning For 2020 Now By Revisiting Your Policies And Plans

With the new year quickly approaching, it is important to re-examine the policies and plans that govern employee compensation, benefits, and responsibilities. These documents can be the difference between a successful year and one you would prefer to forget. Here are a few small changes that can have huge advantages for your business.

Build An Incentive Compensation Plan That Works For Your Company

Great incentive-based compensation plans motivate employees without harming your bottom line. While there is no single way to accomplish these dual goals, the most effective plans do not lock the company into an express or implied contract. Instead, the plan should disclose that it can be modified and canceled at any time.

The plan also should allow the payment calculation to be adjusted when needed (for example, when the size of an employee’s commission is unexpectedly large). This allows the company to reduce commissions that are disproportionate to what was reasonably expected when the plan was created. Indeed, one court recently approved the reduction of a $1 million commission to $150,000. While an 85% reduction might seem unfair, the court emphasized that the company held the “cards with respect to how sales commissions are calculated” because it provided “clear terms” to its employees beforehand.

It also is important that the plan identify who can alter it. Often, overzealous managers convey their own incorrect interpretations about the compensation package. Rather than allow middle management to bind the company through stray comments, the plan should issue a clear warning to employees that they should not make assumptions about how the plan impacts their situations unless that advice comes directly from a designated representative at the company.

Keep Your Company Handbook Aligned With The Changing Times

If your social media policy is more concerned with watercooler humor than a loss of productivity, harm to the company’s reputation, and online bullying and harassment, than it is time to update your handbook. The entire company is put at risk by outdated policies that do not reflect legal developments that deal with discrimination, sexual harassment, reasonable accommodations, family and medical leave, and related matters. For example, employers are now at risk in certain states for discrimination based on hair and hairstyle, as highlighted by a recent settlement directing a salon to pay a $70,000 civil penalty and train its staff on the styling of natural hair in response to accusations that it enforced racially discriminatory grooming policies.

Annual updates come with the added advantage that it is easier for companies to implement, change, and end policies and benefits contained in the company handbook when employees become accustomed to proactive updates. By contrast, infrequent amendments, regardless of how benign, are often met with heightened suspicion if not outright resistance by employees.

Correct Your Wage And Hour Compliance Issues Before Someone Does It For You

Incorrect classification is one of the most common mistakes a company can make, and one of the costliest. Luckily, it is extremely easy to prevent. At the start of every year, you should review the duties and salaries for your employees to confirm that they are properly classified as exempt under federal and state wage and hour laws. This hands-on approach can prevent a large and unexpected tax bill, three years of backpay, and liquidated damages.

Keep Your Plan Documents Up-To-Date

Many companies work with a benefits broker when selecting their health and benefit plans. While brokers offer an important service, all too often they recommend cookie-cutter plan documents that do not stay abreast of regulatory changes. This can expose your business to unnecessary levels of risk.

For example, the IRS recently announced that the minimum annual deductible for a high-deductible health plan in 2020 increased to $1,400 for individuals (up from $1,350) and $2,800 for families (up from $2,700). If your organization uses plan documents, it is critical that you take a proactive approach to ensure that they remain current.

Enjoy The New Year Knowing Your Company Is On The Right Track

While lawsuits are an unfortunate fact of life for most companies, they are not inevitable. Litigation is typically the result of poor planning, unclear documentation, and lack of execution. By taking control of the process early, you are ensuring that the rest of your time can be dedicated to growing your business. With January 1 right around the corner, now is the time to follow through on those new year resolutions from last year.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions