Employee Severance Agreements and Section 409A Deferred Compensation (On-Demand)

Course Description

When ending the employment relationship, employers often offer employees severance pay to ease their transition.  However, Internal Revenue Code Section 409A imposes a number of surprising severance pitfalls that can make the difficult process of separation even more taxing.  This program reveals the common Section 409A traps that snag employers with severance programs and offers practical advice for streamlining the severance process.

Syllabus

1. Overview of Section 409A
   • Brief historical background
   • Basic rules
   • Penalties for noncompliance
2. Section 409A and Severance
   • Compliance vs. Exemption
3. Common 409A Exempt Severance Designs
   • Short-term deferrals
   • Separation pay plans
   • Exempt benefits
4. 409A Compliant Severance Designs
   • Time and form of payment
   • Six-month delay requirement for specified employees
5. Common 409A Issues in Separation Situations
   • “Bad” Good Reason Definitions
   • Release Timing Issues
   • Substitutions

Instructor

William Fogleman, Esq.