Employee Share Plans in Europe and the USA - Sorainen

Employee Share Plans in Europe and the USAGermany7. Employee benefit trustsThe tax status of a foreign trust is determined on a case-by-case basis, andspecific advice should be sought in relation to a plan that involves a trust.8. Data protectionDepending on the structure of the employee share plan administration, employeeconsent may be necessary for the collection, processing and transfer of personaldata. 22 In most cases, the requirement to obtain consent can be avoided if allrecipients of employee data are located in the EU or there is an adequate levelof data protection as further defined in EC Directive 95/46. In any event, thedata collection should be limited to the extent necessary for the planadministration and employee data should only be shared on a need-to-knowbasis.9. Employment law9.1 Please refer to paragraph 4 on pages 5-6 of this guide. This explains theemployment law issues which are generally applicable to a greater or lesserdegree in all the countries covered by this guide.9.2 There is a risk that employees may claim a right to initial or continuedparticipation in an employee share plan or that rights under a plan may beincluded in compensation on termination or may be considered pensionableincome. However, following a decision of the Federal Labour Court, anyentitlements under an employee share plan are, as a rule, not considered part ofthe employment relationship with the employing company where its parentcompany grants the share rights to the employees and the employing companyis not (directly or indirectly) involved in the grant of the rights or the provision ofbenefits and the operation of the plan and the costs of the plan are notrecharged by the parent company to the employing company. If the entitlements22German data protection law imposes certain duties on the employing company in relation to itsemployees. For example, most employing companies must have a data protection officer, whomust be informed in advance about any data processing that is required. A registration of theemployer as a data processor is not required if a data protection officer has been appointed. Foran employee's consent to be valid under German data protection law, it has to be obtained inadvance and should be given in writing once the employee has been informed about the planneddata processing and data transfer. The employees should be informed of the purpose of the dataprocessing and data transfer, the categories of data processed and/or transferred and the identityof all parties to whom their data will be transferred and the country where each party is located. Ifemployee data is collected for the first time without the knowledge of the employee, then there canbe an obligation to inform the employee of the collection. Employee data is not per se regarded assensitive data, but care should be taken not to collect or process sensitive types of data as definedin EC Directive 95/46 without the explicit consent of the employee.UK/1729295/03 85 September 2010