Key Points in This Guide
- 1What a clawback clause actually does
- 2Three types of clawback clauses and how they differ
- 3Common clawback triggers (what causes them)
- 4Red flags in clawback agreements
- 5The difference between clawback and other deductions
- 6State laws that limit clawbacks
- 7How to negotiate clawback limits
- 8What to do if your employer tries to claw back compensation
A clawback clause allows your employer to take back compensation you have already earned and received. You might receive a $50,000 bonus in January, then lose it in December if the company claims you breached your contract or missed performance targets. Clawback clauses are increasingly common in compensation packages. Understanding what triggers a clawback and how to negotiate is critical.
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