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.
The employer appealed, again arguing that the lost wages award legally qualified as compensation, which meant that a setoff should have been ordered. The appeals court concluded that the trial court was correct not to order the setoff. The law that applied to this case defines compensation as payment “paid to an individual for services rendered as an employee to one or more employers.” The key part of that language was the “services rendered” phrase. In order for a setoff to be required, the employee must have received his money for some sort of service that he actually performed. By definition, an award of lost wages is not payment for services performed but payment to compensate a plaintiff for a period of time in which, due to his injury, he was unable to perform services for pay.
For thorough and determined representation in your injury case, talk to the diligent Chicago injury attorneys at Katz, Friedman, Eisenstein, Johnson, Bareck & Bertuca. Our team has been effectively representing personal injury clients for many years and is ready to provide you with the skill and determination you deserve. To set up a free case evaluation, contact us at 800-444-1525 or through our website.
More Blog Posts:
Illinois Railway Worker Obtains $21M Damages Award for Foot Injury Suffered in Railyard Accident, Chicago Injury Attorneys Blog, Nov. 17, 2017
Chicago Area Teacher Wins Case for Worker’s Compensation Benefits After Injury in Afterschool Basketball Game, Chicago Injury Attorneys Blog, March 16, 2017