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How to Retention Agreement - Create Signing Links with Link2Fill

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In this video, David Schalis from 2GuysBuildaBiz discusses the SMMA legal agreement, emphasizing the importance of having proper legal documentation when starting or running a business. He encourages viewers to subscribe for more business-related content and suggests tapping the notification bell for updates on future uploads. David provides a legal disclaimer, clarifying that neither he nor his co-host Derek are legal professionals and that the video does not constitute legal advice. Instead, he recommends consulting with a licensed attorney to ensure the agreement provides adequate protections and coverages.

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What is the difference between retention bonus and severance pay?

Both agreements encourage employees to commit to the organization; however, retention bonus agreements generally provide a better compromise between shareholder interests. This is because severance pay will be paid upon contract termination whether the employee stayed based on the agreed-upon tenure or not.

What is an example of a retention bonus policy?

For example, if the employee completes 9 months of service, the employee must repay 25% of the retention bonus paid (for the remaining 3 months of the year for which the employee did not provide service).

How do you communicate a retention bonus?

When writing a retention bonus letter, make sure you keep it short and simple. Start by showing that you value the employee before moving into the details of what the retention bonus is. Offer a way for the person to show interest in the offer so that you can move forward with them signing the agreement.

What is the difference between severance and retention?

Retention agreements are geared to an individual regardless of leadership position, serve the employers interest and typically expire after a set time. Severance pay arrangements protect employees terminated against their will, whether individuals or an entire workforce.

What is another name for retention bonus?

A retention bonus, also called retention pay or a retention package, is a lump sum of money a company pays to an employee to stay with the company for a specific amount of time.

How do you structure a retention bonus?

Bonuses are typically paid in either one large lump sum, or occasionally employers will pay in regular installments. The bonus is typically offered as a percentage. For example, a 10% retention bonus for an employee that makes $124,000 a year would be $12,400.

Do I have to pay back a retention bonus?

Reimbursement Agreement: Should a retention bonus be paid in periodic installment, an agreement may require the employee to repay or reimburse the company for previously received retention bonuses should the employee leave prior to the final payment.

What does a retention bonus mean?

A retention payment (sometimes called a stay bonus or retention incentive) is a lump sum payment outside of an employees base pay that is offered as an incentive to convince a key employee to remain in their current position for a specific amount of time to meet critical and priority business needs.

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Retention Agreement - Create Signing Links with Link2Fill