As a reminder for all Louisiana businesses, effective August 1, 2025, the Louisiana Wage Payment Act (LWPA) clarifies that the requirement to pay all wages upon termination does not apply to “profits interest granted or issued by an entity taxed as a partnership for federal income tax purposes,” even if the recipient was an employee.
- This exemption does not extend to limited liability companies (LLCs).
Changes:
- The LWPA and related section (R.S. 23:634) now exclude partnership profits interests from final wage payment obligations.
- Regular wages, bonuses, and other standard compensation remain covered.
Why It Matters
- Employers with partnership structures can avoid treating profits interest like cash wages upon termination, reducing administrative and financial complications.
- The change provides clarity and helps prevent disputes over whether equity-like compensation should be paid out as wages.
For additional information: Louisiana – Act No. 113 (SB 113)
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