Discrimination Settlement Check
I recently mediated a discrimination charge with my employer and the dispute was resolved in my favor. When the check came, it stated on the check that it was a "severence pay" check. I am still employed and I fear that if I sign this check it will come back to haunt me later. Any advice?
1 answer | asked May 17, 2005 08:23 AM [EST] | applies to Pennsylvania
Answers (1)
You likely should get a new check issued
Before I respond to your inquiry, I must state that we have not spoken, I have not reviewed the relevant documents and facts, and I do not represent you. Therefore, my discussion below is not a legal opinion, but is informational only. Finally, my discussion applies only to issues to which Pennsylvania or Federal law apply, unless otherwise specified.
That being said, you shoujld likely get a new check issued to you without the 'severance pay' annotation. If your claims involved any personal injury claims, you may not have to pay taxes on amounts that compensate you for such injuries. By denoting the check as any kind of 'pay,' you may find that taxes are taken out where they ought not to be.
Furthermore, accepting the check can arguably be evidence that you agreed to terminate your employment as part of the settlement agreement. Without viewing the agreement, however, I cannot give you advice on that issue.
Finally, depending on your position and pay, certain new 409A tax penalties can apply to amounts paid in years after they are earned; severance pay is one. Although it seems unlikely that you would be assessed these penalties, it is an issue that needs to be addressed if they pay is reported as severance pay.
If you would like to discuss this matter further, please feel free to contact me at the below address(es) or number.
/Christopher E. Ezold/
Nancy O'Mara Ezold, P.C.
401 City Line Avenue,
Suite 904
Bala Cynwyd, PA 19004
(610) 660-5585
Cezold@Ezoldlaw.com
posted by Christopher Ezold | May 17, 2005 09:03 AM [EST]
Before I respond to your inquiry, I must state that we have not spoken, I have not reviewed the relevant documents and facts, and I do not represent you. Therefore, my discussion below is not a legal opinion, but is informational only. Finally, my discussion applies only to issues to which Pennsylvania or Federal law apply, unless otherwise specified.
That being said, you shoujld likely get a new check issued to you without the 'severance pay' annotation. If your claims involved any personal injury claims, you may not have to pay taxes on amounts that compensate you for such injuries. By denoting the check as any kind of 'pay,' you may find that taxes are taken out where they ought not to be.
Furthermore, accepting the check can arguably be evidence that you agreed to terminate your employment as part of the settlement agreement. Without viewing the agreement, however, I cannot give you advice on that issue.
Finally, depending on your position and pay, certain new 409A tax penalties can apply to amounts paid in years after they are earned; severance pay is one. Although it seems unlikely that you would be assessed these penalties, it is an issue that needs to be addressed if they pay is reported as severance pay.
If you would like to discuss this matter further, please feel free to contact me at the below address(es) or number.
/Christopher E. Ezold/
Nancy O'Mara Ezold, P.C.
401 City Line Avenue,
Suite 904
Bala Cynwyd, PA 19004
(610) 660-5585
Cezold@Ezoldlaw.com
posted by Christopher Ezold | May 17, 2005 09:03 AM [EST]
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