On June 17, 2011, Pennsylvania Governor Tom Corbett approved changes to the Pennsylvania Unemployment Compensation Act. The changes described below will be effective January 1, 2012. Although designed as a cost-cutting measure for the Commonwealth budget, the changes can have unexpected consequences for attorneys and clients when negotiating rental packages. and lawyers practicing in this area of law should expect interesting and surely confusing issues in the future.
In general, the Pennsylvania legislature revised the 80 PS section to 43 PS for claimants to account for unemployment benefits when applying for Unemployment Compensation Benefits. If the changes in section 804 (d) do not require a potential claimant to keep claiming unemployment benefits until after he has been fully paid, it seems likely that he will be liable for potential claims. ; entitlement to benefits. Although the new provisions may reduce eligibility for potential claims, it is likely that the litigation could be greatly increased, as it raises more questions than the issues they have allegedly resolved. Examples of the types of problems that may arise below
First example: Very often employee issues, unemployment compensation benefits are treated in the context of a broader and wider employment problem between the employer and the former employee. Once the issue of employment has been resolved to some extent, it is not unusual for a portion of the settlement funds to be issued directly to the employee, the remainder directly to the employee & # 39; s will be issued to the lawyer. With the new Unemployment Compensation law it is not clear what the employee is doing. s funds directly to the lawyer & # 39; s staff & # 39; whether they would be considered as part of the debt.
Second Example: Occasionally, the employer refuses to give the employee and his lawyer two (2) special checks. In this case, it is common for attorneys to receive all the funds, remove the extra fees and costs, and issue a check to the employee to make a difference. Despite receiving a reduction in attorneys' fees and costs, the employer will generally award the employee 1099 or W-2 for the full amount. As stated above, it is unclear whether the total amount in the context of Unemployment Compensation or the amount the employee actually receives will be considered as a dividend.
Third Example: Sometimes, the employer directly funds the employee and the amount of the retainer he or she has already paid. The employer issues 1099 for the money given to the lawyer. The lawyer also pays the retainer a refund. Could this return be included in a distribution package for employees?
Fourth example: some employees & # 39; Settlements with employers include, but are not limited to, the payment of compensation to an employee and, in particular, the amount to be paid for punitive damages. Termination payments provide W-2 issued to the employer, paid for "punitive damages," while giving the employer 1099 and generally do not fall under the standard tax withholding tax. Alternatively, some employers give a non-taxable amount of money and issue 1099 for the provincial amount. It is unclear how the Pennsylvania Department of Labor will address these situations. Why would the total withholding amount be compensated for the employee distribution package? If not, and only account for the net amount paid, it could be that the employee who received the pre-tax penalty package could have been fined by the employee who received the higher amount and the Department of Labor. may offset larger amounts.
As seen above, Pennsylvania's & # 39; Additions to Unemployment Compensation Potential Claim & # 39; while this may reduce eligibility for benefits, they raise more questions than the issues they have resolved. It will be interesting to see how the Department of Labor and the courts deal with it.
For readers & # 39; additions to the Pennsylvania Unemployment Compensation Act include section 434 of Pennsylvania, Pennsylvania & # 39; s Unemployment Compensation Act has been amended by a subsection (4) (1) with an amendment: "Benefits shall be paid to each eligible employee who is unemployed this week, deducting compensation from his weekly benefit rate (i), if any, to be paid or payable. is paid for services rendered during those weeks, except for his partial benefit credit and (ii) the vacation pay, if any, that exceeds his partial benefit credit, when he is paid to the company permanently or permanently separated from his job and (iii) the amount attributed to the Week -payment "
43 PS (80) d) (1.1) is added to the law and states: "(i)" Payment of care "An employer means one or more payments to the employer for separation from an employer. , regardless of whether the employer is bound by the law, contract, statute or otherwise, the term does not include payment of pension, retirement, leave, or supplemental unemployment benefits. will be deducted from forty (40%) of the average annual salary as calculated under subsection (s) as of June 30 of the calendar year. The claim starts with the year of training and the year of benefit the employer has paid or has paid in full. iii) Payment is attributed as follows: (A) Payment is attributed to the day of payment; site, weekly or weekly employment & # 39; s sepration. (B) The number of days or weeks to which the taxpayer is entitled is determined by the daily or weekly wage of the claim. (C) The amount payable to each day or week is equal to the claimant's daily or weekly pay. (D) When the termination of payment is made taking into account the number of days, it should be attributed to the regular working week in the calendar of the week. "
Originally published on November 18, 2011 in The Legal Intelligencer.