EEOC SPEAKS TO BACK PAY TAX LIABILITIES
Here is a very interesting case from EEOC in which it ordered a federal agency not only to reimburse an employee for any extra tax liability flowing from a large back pay check, but it required the agency to promote the employee twice. Check out the short summary of the case written in EEOC’s own words.
Following an investigation of Complainant’s EEO complaint, an AJ found that the Agency discriminated against when it did not select him for an Engineering Technician position. As relief, the AJ ordered the Agency, among other things, to retroactively promote Complainant to the position with all applicable benefits, and pay him appropriate back pay. The Agency fully implemented the AJ’s order. Complainant subsequently notified the Agency that it failed to fully comply with the AJ’s order because it did not promote him to a higher level and did not clearly document the amount of back pay to which he was entitled. Complainant ultimately appealed the issue of his relief to the Commission. On appeal, Complainant asserted that the original selectee and two other individuals were promoted to a higher grade level due to an accretion of duties. The record contained a letter from an Agency attorney agreeing that Complainant’s record needed to be corrected to reflect the promotion. The Commission stated that the AJ’s award clearly ordered the Agency to include all benefits Complainant would have received had he been selected, which would have included the accretion of duties promotion. Therefore, the Commission concluded that the Agency must retroactively promote Complainant to the higher grade level beginning when the original selectee was promoted, and recalculate Complainant’s back pay. The Commission also found that Complainant was entitled to reimbursement for increased tax liability. The Agency paid Complainant back pay in a lump sum payment, and the Commission has held that an Agency is responsible for any proven increased income tax burden resulting from such a payment. Thus, the Complainant is entitled to be reimbursed for the amount of his increased tax liability. Complainant v. Dep’t of Veterans Affairs, EEOC Appeal No. 0120113877 (May 14, 2014).