29 Mar 2022
Surprise! Your Wrongful Employment Termination Settlement is Taxable
Taxation happens! Happy to have settled a wrongful termination claim, but then you learn that much of it is subject to tax? The taxability or deductibility of a big award or claim settlement can have a major effect on the financial outcome. The unwanted extra cost of an unexpected tax payment can significantly decrease the perceived value of a settlement offer and push the settling parties further apart.
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- Settlement Agreements: Negotiation Techniques (Pro-Employee)
Typically, in an employment dispute, the defendant’s employer’s attorney will prepare the initial draft of the settlement agreement. Once you have agreed to the monetary terms of settling your client’s claim, you may think you are near the finish line. But negotiation of the final terms of the settlement agreement is often difficult and time consuming..
Practical Guidance Updates
Featuring the latest updates from your Practical Guidance account.
- Employee Benefits & Executive Compensation Key Legal Developments Tracker
Stay informed on new developments.- ERISA. DOL published compliance assistance cautioning plan fiduciaries to exercise extreme care if considering adding a cryptocurrency option to a 401(k) plan's investment menu. DOL, Compliance Assistance Release No. 2022-01.
- ERISA. DOL announces proposed rule to modify the process for applying for administrative exemptions from the prohibited transaction rules under ERISA and the IRC codified at 29 C.F.R. 2570.30 et seq., which were last updated in 2011. 87 Fed. Reg. 14,722 (Mar. 15, 2022).
- Health and Welfare Plans. Congress passes Consolidated Appropriations Act, 2022, which includes a provision to allow high deductible health plans to cover telehealth services without a deductible through 12/31/22, extending temporary period under the CARES Act. (H.R. 2471), § 307.
- Executive, Incentive, and Equity Based Compensation. Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 enacted, prohibiting enforcement of pre-dispute mandatory arbitration clauses and joint, class, or collective action waivers for sexual assault and sexual harassment claims. Pub. L. No. 117-90(adding 9 U.S.C. §§ 401, 402). See New Nationwide Ban Against the Enforcement of Mandatory Arbitration Agreements in Sexual Misconduct Cases.
- Document alerts allow you to stay current on legal developments that affect your practice. Find out how to set up your document alerts.
- Check out the new Practical Guidance Author Center! Learn about the 1500+ leading attorney authors contributing to our 20 practice areas, and find out how you can Become a Practical Guidance Author.
- The Practical Guidance Journal Spring 2022 Edition includes market trends on post-employment restrictive covenants.
- New Practical Guidance Content
- Department of Labor Cautions Plan Fiduciaries Considering Cryptocurrency-Based Investments: Compliance Assistance Release No. 2022-01
- Department of Labor as ERISA's Cops: DOL ERISA Enforcement Overview and Current Priorities
- Participant-Directed Investments through Brokerage Windows
- 2022 Health Law and Policy Outlook
- On the Hunt for Good Fiduciary Processes? What to do After the Supreme Court Decision in Hughes
- Most EAPs Are Group Health Plans subject to COBRA
- Applicable Large Employer (ALE) Considerations in the Context of an M&A Transaction
- Investment Review Checklist for 401(k) Plan Investment Committee
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