News & Analysis as of

Wages Severance Pay

Mayer Brown

FGTS Digital to Begin Effective Operation in March 2024

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The Brazilian Ministry of Labor and Employment (“MTE”) described the Length of Service Guarantee Fund Digital (“FGTS Digital”) as “a set of integrated systems that will manage the various processes related to fulfilling the...more

Goodwin

Ten Action Items for Employers When Planning Layoffs

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​​​​​​​A frequently used step to control costs in times of uncertainty is to reduce personnel. A well-planned restructuring or reduction in force, generally referred to as a “layoff,” can achieve meaningful cost reductions...more

Carlton Fields

Retirement Plans Can Solve The Million-Dollar Problem For Entities At Risk Of Excise Taxes On Compensation

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All entities, including governmental entities, are now potentially liable for penalties due to overpaying employees....more

Carlton Fields

Arbitrator’s Decision Not Based On Manifest Disregard Of The Law, But Challenge To That Decision Was Not So Meritless As To...

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Jonathan Kessler brought a claim in arbitration against his former employer, Kent Building Services, after he was fired from his job as Kent’s president, asserting that he had not been fired for cause and was thus owed...more

Fenwick & West LLP

Supreme Court Confirms FICA Taxes Must be Withheld from Severance Payments

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Finding severance payments to be a form of “remuneration for employment,” the United States Supreme Court in United States v. Quality Stores, Inc. held that such payments are taxable wages – and thus subject to withholding –...more

Fenwick & West LLP

Fenwick Employment Brief - April 2014

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Supreme Court Confirms FICA Taxes Must be Withheld from Severance Payments - Finding severance payments to be a form of “remuneration for employment,” the United States Supreme Court in United States v. Quality Stores,...more

Baker Donelson

Severance Payments: To Tax or Not to Tax, that is the Question!

Baker Donelson on

On October 1, 2013, the U.S. Supreme Court agreed to hear the federal government's appeal of the Sixth Circuit Court of Appeals' decision in United States v. Quality Stores, Inc. (In re Quality Stores, Inc.), 693 F.3d 605...more

Ogletree, Deakins, Nash, Smoak & Stewart,...

Is the Severance that Your Company Pays to Fired Workers Taxable? The Supreme Court Will Decide

On October 1, 2013, the Supreme Court of the United States agreed to hear a case concerning whether employees’ severance payments are taxable. The case, United States v. Quality Stores, Inc., came out of the Sixth Circuit...more

Mintz - Employment, Labor & Benefits...

A FICA Refund for Employers? Supreme Court to Decide Whether FICA Obligations Extend to Severance Pay

As all employers know, wages paid to employees are subject to required withholdings and deductions for income taxes and employee contributions to Social Security and Medicare (which is commonly referred to in shorthand as...more

K&L Gates LLP

Quick Tips on Dealing with Employment Termination Issues in China

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On June 21, 2013, a United States medical supplies company executive was taken captive by Chinese employees in his Beijing factory. The employees have stated that the owner owes them two months’ back pay and expressed concern...more

Proskauer Rose LLP

Sixth Circuit Will Not Rehear Quality Stores Decision that Severance Pay in Connection with a Reduction in Force is not Subject to...

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On September 7, 2012, the Sixth Circuit Court of Appeals held in United States v. Quality Stores, Inc. that severance payments to former employees pursuant to an involuntary reduction in force are not taxable "wages" for...more

Ballard Spahr LLP

Employers Should Evaluate Refund Opportunities Following Sixth Circuit Ruling on FICA Taxes and Severance Payments

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In United States v. Quality Stores, Inc., the Sixth Circuit held that payments of supplemental unemployment benefits (SUB payments) are not taxable wages subject to FICA tax withholding. Although the issue is not finally...more

Ogletree, Deakins, Nash, Smoak & Stewart,...

Sixth Circuit Decision Offers FICA Tax Refund Opportunities for Severance Pay

Any employer that implemented reductions in force or layoffs after 2008 should consider filing refund claims for the Federal Insurance Contributions Act (FICA) taxes paid on severance benefits based on a recent Sixth Circuit...more

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