Salary Deferrals in the Time of COVID-19

As the saying goes, “drastic times call for drastic measures” and, from an economic standpoint, these are drastic times. To fight the battle to stay in business many employers are considering a wide range of alternatives, including employee furloughs, layoffs and terminations. While some employers may also consider sweeping salary reductions, other employers may consider reducing current salaries with the promise to pay those salaries in the future. Employers taking this latter approach must understand that deferring salaries from 2020 to 2021 (or to some other future year) can create compliance issues under Section 409A of the Internal Revenue Code (“409A”). Read More ›

Posted in Employee Benefits, Executive Compensation, Qualified Retirement Plans | Tagged , , , , ,

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