A recent ruling by the Illinois Appellate Court was an important win for injured workers. The court’s opinion stated that a railroad worker’s award of lost wages could not be a sum from which the worker was required to pay taxes because the relevant tax law only required withholding on “services rendered,” and an award of lost wages, by definition, could not be money paid for the actual performance of services. Whether it is fighting against a reduction in your damages award or battling some other aspect of your injury case, make sure you have skilled Illinois injury counsel advising you and representing your interests.
The railroad worker, Rafael, was a freight conductor for a major railroad. While the conductor was working one day, Rafael’s train stopped short, and the stop threw him from his feet. The conductor suffered serious injuries to his neck and shoulder. Rafael sued under the Federal Employers Liability Act to recover compensation for the harm he had suffered in the accident. FELA is the statute that injured railroad workers must use to obtain compensation for their injuries.
The conductor sought damages for “lost wages, medical bills, loss of future earning capacity, and pain and suffering.” A jury heard Rafael’s case and concluded that he was entitled to a judgment totaling $821,000. $310,000 of that was past and future lost earnings. The damages awarded included a sum for lost wages. After the jury reached its verdict, the railroad asked the court to order a setoff, which is a type of reduction in the damages award. The employer’s argument was that the conductor owed taxes on his lost wages award under the Railroad Retirement Tax Act. The trial court refused, concluding that the law does not authorize the withholding of taxes from personal injury awards, including those awarded under FELA.