• Clawback is a contractual clause that requires the employee to return money already paid by the employer, sometimes with a penalty.

  • Clawbacks act as insurance policies in the event of fraud or misconduct, a drop in company profits, or poor employee performance.
  • Regulations generally only include incentive payments such as bonuses or other benefits.
  • Clawbacks are used primarily in the financial industry, but can also be found in government contracts, pensions, and Medicaid.