This post is focused on common traps that many employers fall into in the course of termination. While it is written from the perspective of employers, each of these points applies equally to employees, since an individual that misunderstands these issues will fail to enforce their legal rights and end up leaving substantial amounts of money on the table when they lose their job.
In many small and even medium-sized companies, financial reporting during the year does not include all of the adjustments made at the year-end (often in connection with the audit or review of the annual financial statements by an independent professional accountant).
Deferred compensation in the form of future bonuses, retention payments, and stock options has become a standard element of executive compensation. While there are countless variations of such plans, they are all designed to incent employees to remain with their employer, and to perform to the employee’s highest capability while he is there. In order to meet these goals, such plans will often include a deferral of the benefit once it is earned, in order to create an incentive to remain with the employer.