In labor and employment law cases, a successful plaintiff may be entitled to monetary damages including several years of front pay and/or back pay, in addition to other economic and non-economic damages. But what are the tax implications for a plaintiff who receives such a lump sum award?
Discrimination in the Workplace
Discrimination is the unequal treatment of an individual in a protected class. That is, one who suffers from unequal treatment because of sex, gender, race, disability, national origin or sexual orientation. Discrimination may take several forms:
- Age discrimination under the New Jersey Law Against Discrimination (LAD) and the Federal Age Discrimination in Employment Act (ADEA)
- Racial discrimination
- Gender discrimination
- Disability discrimination under the New Jersey Law Against Discrimination and the American with Disabilities Act (ADA)
Unequal treatment based upon age is governed by both Federal law, (by way of the Age Discrimination in Employment Act), and State law, (through the New Jersey Law Against Discrimination).
Under the Age Discrimination in Employment Act (ADEA), protection is limited to individuals who are at least 40 years old. It must be shown that age actually motivated the decision to adversely affect an individual’s employment.
Under the New Jersey Law Against Discrimination (LAD) it is unlawful for an employer, because of age, to refuse to hire, employ, discharge or require an individual to retire based upon considerations of age. An employee must demonstrate that age played a role in the decision making process and that it had a determinative influence on the outcome of that process.
Unequal treatment based on race is prohibited as to any racial group. To establish a case, an employee must demonstrate the conduct in question would not have occurred "but for" their race and that there was a specific intent to discriminate because of, or as a result of, the race of the complaining party.
Both the Federal law and the New Jersey Law Against Discrimination (LAD) prohibit an employer from engaging in gender discrimination or discrimination based on sex. To establish a case an employee must show that:
He/she suffered discrimination because of his or her sex;
The conduct was of such a severe or recurring nature so as to cause harm;
The conduct was detrimental in its affect on the employee; and,
The sexually charged conduct in question would have similarly affected any person in the position of the employee.
The Americans with Disabilities Act, (ADA) prohibits discrimination on the basis of disability in all employment practices. However, only a "qualified employee" with a disability who can do the "essential functions" of the job are protected by law.
An "individual with a disability" under the ADA is a person who has a physical or mental impairment that substantially limits one or more major life activities, such as walking, breathing, seeing, hearing, speaking, learning, and working.
A "qualified employee or applicant with a disability" is a person:
Who satisfies the skill, experience, education, and other job-related requirements of the position held or desired; and,
Who, with or without reasonable accommodation, can perform the "essential functions" of that position. An "essential function" is generally those skills necessary to perform the job in question.
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