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NLRB Adopts Expanded Remedies for Backpay Awards
Practical Law Legal Update 8-523-4047 (Approx. 4 pages)
NLRB Adopts Expanded Remedies for Backpay Awards
by PLC Labor & Employment
| Published on 03 Jan 2013 • USA (National/Federal) |
In Latino Express, Inc., the National Labor Relations Board (NLRB) held that it will now require respondents that owe backpay to submit documentation to the Social Security Administration (SSA) so that an award is allocated to the year the income would have been earned and to reimburse backpay recipients for certain excess income taxes they may owe.
On December 18, 2012, a three-member panel (Board) heading the NLRB's judicial functions issued a decision in Latino Express, Inc., holding that the NLRB will now require respondents that owe backpay to:
- Submit documentation to the Social Security Administration (SSA) so that an award is allocated to the year the income would have been earned, rather than recorded as a lump sum taxed in the year it is received.
- Reimburse backpay recipients for any excess income taxes they may owe because the backpay award is paid as a lump sum rather than allocated to the year the income would have been earned if the respondent had not violated the NLRA.
The Board found that the new remedies were necessary to make individuals who receive lump-sum backpay awards whole for losses suffered as a result of unfair labor practices (ULPs). In the absence of these remedies, the Board stated, individuals could potentially suffer:
- Disqualification from or reductions to Social Security benefits.
- Loss of pay due to heightened tax burdens.
The newly adopted remedial measures, which apply to all pending and future cases, follow a July 21, 2012 decision in Latino Express in which the Board:
- Determined that Latino Express committed a ULP when it terminated two employees.
- Invited interested parties to file briefs on whether these measures should be applied to employers who owe backpay.
Court documents: