The reason the employer wants this language is that most of the comparisons in labour law apply to wage refunds, future loss of wages or severance pay which are wages. Wages must be taxed by the tax and the employer must pay his share of the payroll tax. If the IRS came back later and it should have been more (or all) of it, the employer wants the employee to agree to pay both the employee`s and the employer`s share of labor taxes. I am unusual in the way I ask for billing money to be paid to customers. Normally, I ask that the worker`s share be paid as wages. I have several reasons for this. First, no matter how many times I tell the employee to put about 1/3 of the money aside in a CD that was set aside on April 1st is due for him to pay his taxes, it is too tempting to spend the money. I had too many people calling me in April and crying that I couldn`t pay their taxes. Second, if the IRS were to find that the money should have been salaries, my clients cannot afford to pay their employer`s share of taxes on top of their own. This is a risk that I do not usually recommend.
Let us now return to this tax clause. Before, I did not object to it being added as it is. If my client asks that some of the money be set aside as something other than salary, he should be willing to take the risk that he did it wrong. (On the other hand, if the employer insists that some of them be called compensatory damage or emotional damage, in order to save him money, I insist that he take out that language.) I say I agreed earlier because I did have an employer who argued a posteriori that this clause meant that they could withhold the federal income tax and the worker`s labor tax and they could not file them afterwards, and they said that they did not have to pay their share of the labor tax on wages. It`s probably only a thing in South Florida, but nevertheless, this kind of jerky behavior means I`m going to have to change my language in the future. Here`s what I`m asking employers to add this clause now: S&P quickly found a need for its risk transfer mechanisms when the project took a bad turn. The Landkreis resigned S&P after several problems in construction and then sued S&P for damages. The parties conducted arbitration proceedings and S&P informed its insurance providers and engaged its subcontractors through their indemnification agreements.
The arbitral tribunal has given to the Landkreis: this will continue my series of contributions on the deconstruction of lawyers in employment contracts. This week, I`m going to discuss some of the languages I often see in severance pay or concord agreements when, at least, some of the money paid has not withheld taxes. The clause will be roughly as follows: S&P then concluded a series of general comparisons with its subcontractors. During this process, U.S. Fire S&P indicated that it would not object to “appropriate comparisons.” Total subcontractor operations amounted to approximately $4.5 million. S&P then sought out from its insurance providers to cover the difference. U.S. Fire refused to contribute, arguing that S&P had not exhausted its “Other Insurance” coverage within the meaning of its policy. S&P and AGLIC decided to split the difference and then filed an action against U.S.
Fire for violating the directive. What a practitioner may find is that all recovery methods must be carefully weighed when transaction negotiations are initiated with subcontractors. . . .