California Employment Law Update

Tag Archives: withholding

Severance Payments Are Taxable Wages Under FICA

United States v. Quality Stores, Inc., 572 U.S. ___, 134 S. Ct. 1377 (2014) Before and following the filing of an involuntary Chapter 11 bankruptcy, Quality Stores and its affiliated companies terminated thousands of employees. The employees received severance payments, and Quality Stores reported those payments as wages on W-2 tax forms, paid the employer’s required … Continue Reading

Employer Properly Withheld Taxes From Settlement Check

Rivera v. Baker West, Inc., 430 F.3d 1253 (9th Cir. 2005) Jack Rivera sued his former employer, Baker Concrete Construction, Inc., for race and national origin discrimination and wrongful termination. The matter was settled for “$40,000 less all lawfully required withholdings” during a settlement conference before a magistrate judge. Baker subsequently issued a settlement check … Continue Reading
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