A recent Supreme Court ruling in a FELA related injury case finds some of the railroad’s payment to injured workers for missed wages is taxable. This may have an impact on FELA related settlements going forward and how awards are structured.
The opinion in BNSF Railway Co Vs Loos likens the payments to compensate for lost wages to be comparable to wages under the present Social Security system. Mr. Loos sued the railway under FELA (the Federal Employers’ Liability Act) for injuries he sustained while working in the railyard at BNSF. The original jury awarded Mr. Loos $126,212.78, allotting $30,000 of that amount to cover the wages Mr. Loos lost as a result of his injuries.
BNSF wished to withhold taxes of $3,765 on the $30,000 lost wages portion of the award, but this was rejected by the District Court as well as the Eighth Circuit Court of Appeals. However, the US Supreme Court’s decision ruled the compensation for missed wages is taxable under the Railroad Retirement Tax Act (RRTA).
Railroad workers face unusually high risk of serious injury or a wrongful death due to the nature of railroad work. FELA was established to ensure they receive the compensation necessary to deal with the types of severe injury one is exposed to in a rail yard. The families of railroad workers who lose their life while working for the railroad may bring a wrongful death action.
A recent Supreme Court ruling in a FELA related injury case means the injury settlement must be expertly constructed to minimize the impact of tax. The experienced FELA injury and wrongful death attorneys at Hargadon, Lenihan & Herrington PLLC (HLH) each have decades of experience in these legally complex cases. If you or a loved one suffer injury or lose their life while working for the railroad we invite you to review the strong recommendations of former clients and contact HLH or call (866) 583-9701 to speak with one of our attorneys personally for a free consultation. Ask how we not only work to achieve a full and fair settlement or verdict in our FELA cases, but how the structure of these cases can affect the net amount you are able to keep at the end of your case.