Taxpayer funded sexual harassment settlements aren’t anomalies; they’re part of a broader structure where the state, as employer, pays for injuries caused by employee actions. Why does the law make employers pay for bad acts by their employees?
Full Answer
How much have taxpayers paid to settle sexual harassment claims against Congress?
Nearly $300,000 in taxpayer funds has been spent to settle 13 claims against members of Congress or their offices since 2003. The most recent total is significantly smaller than totals for later years: From 2008-2012, the Treasury Fund paid more than $174,000 to settle eight cases that involved either sexual harassment, sex discrimination or both.
Can I deduct attorney's fees related to a sexual harassment settlement?
Answer: "No, recipients of settlements or payments related to sexual harassment or sexual abuse, whose settlement or payment is subject to a nondisclosure agreement, are not precluded by section 162 (q) from deducting attorney’s fees related to the settlement or payment, if otherwise deductible."
Do executive branch agencies track sexual harassment claims?
Executive branch agencies don’t uniformly track claims or report details of settlements paid out via a federal fund. Executive branch agencies have settled dozens of sexual harassment cases involving federal workers in recent years, but the resulting taxpayer-funded payments are shrouded in mystery.
How much has Twitter paid out in settlements for sexual harassment?
The account has paid out $17 million in the past 10 years, public records show, although it is not clear how much of that was for cases of sexual harassment.
Which states have banned the use of public dollars for settlements or payouts related to sexual harassment?
Lawmakers in at least five states — California, Illinois, Iowa, New York and Pennsylvania — have proposed banning the use of public dollars for settlements or payouts related to sexual harassment allegations against state lawmakers. Advocates for taxpayers, such as Pete Sepp, president of the nonprofit National Taxpayers Union, ...
Who is the Illinois state representative who proposed a ban on the use of public dollars for settlements?
Illinois state Rep. David McSweeney, a Republican, proposed a ban on the use of public dollars for settlements after revelations of settlements involving members of Congress. McSweeney said he doesn’t know of any Illinois state lawmakers who used taxpayer dollars to settle harassment claims.
Why do some victims file claims against employers, not individuals?
Some victims file claims against employers, not individuals, because it helps ensure that they will be compensated for any damages. The government can easily cut a check to compensate the victim for a lawmaker’s actions, Yamada said, while the individual lawmaker may not have the financial resources to do so.
How much did Caltagirone's insurance pay out in 2015?
The state’s insurance paid out $250,000 in 2015, and no one said a word — even during the next year’s elections, when Caltagirone retained his seat. This secret settlement is one of many involving state lawmakers or legislative aides that have been exposed in the last few months, as a wave of sexual misconduct allegations has flooded the country.
Why are lawmakers on the hook for bad behavior?
Legislatures are often on the hook for the bad behavior of lawmakers because, like other employers, they are responsible under the Civil Rights Act for creating a workplace that is free from harassment and discrimination. Employers that don’t attempt to prevent harassment — and report and investigate claims when they arise — can be held liable.
Who is Pete Sepp?
Advocates for taxpayers, such as Pete Sepp, president of the nonprofit National Taxpayers Union, say lawmakers need to be held responsible for their actions. “They are supposed to be answerable to the people who pay the bills,” Sepp said, “and those people are saying right now that this situation is untenable.”.
What is a settlement or payment related to sexual harassment?
any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement, or. attorney's fees related to such a settlement or payment. The implications of this change in law are significant, perhaps even for individual taxpayers. (Unlike many of the changes to individual tax in ...
Can you deduct sexual harassment awards?
Employers who paid awards in sexual harassment lawsuits generally could deduct the awards paid and attorneys’ fee’s incurred in the lawsuits as ordinary and necessary business expenses. Current law. Sec. 162(q), which addresses the tax deductibility of expenses related to sexual harassment settlements, states: ...
Can you deduct attorneys fees above the line?
It remains clear that if the lawsuit is a qualified personal injury case and if no interest and punitive damages were paid, then attorneys' fees can be deducted above the line. Also, if a claim is brought against an employer that affects his or her trade or business, then, generally, the attorneys' fees may be deducted above the line. However, the limitation on the deductibility of legal expenses applies when the case has anything to do with sexual harassment and contains a nondisclosure agreement. As a rule, any settlement that involves punitive damages is taxed on 100% of the recoveries. The tricky part to this is how these recoveries are taxed.
Will there be an increase in settlements without nondisclosure agreements?
Only time will tell how this will play out, but it is highly likely that an increase in settlements without nondisclosure agreements will cause more victims of sexual harassment to come into the public light when they hear other encouraging voices not silenced by nondisclosure agreements.
Is emotional distress taxable?
If you make claims for emotional distress, your damages are taxable. If you claim the defendant caused you to become physically sick, those damages can be tax free. If emotional distress causes you to be physically sick, that is taxable. The order of events and how you describe them matters to the IRS.
Is stress at work a tax free injury?
Some plaintiffs in employment suits have had settlements classified as tax-free. In one case, stress at work produced a heart attack, physical sickness that qualified for tax free treatment.
Should plaintiffs get tax advice before settlement?
Whenever possible, it is advisable for plaintiffs to get some tax advice before a settlement is documented . The IRS isn’t bound by the parties’ tax characterization, but it is often respected if reasonable. Besides, once the documents are signed it will be too late to try to address it.
Is a settlement tax free?
Whenever possible, it is advisable for plaintiffs to get some tax advice before a settlement is documented. The IRS isn’t bound by the parties’ tax characterization, but it is often respect ed if reasonable. Besides, once the documents are signed it will be too late to try to address it. The interactions between physical and emotional injuries and sicknesses are starting to be explored. Some plaintiffs in employment suits have had settlements classified as tax-free. In one case, stress at work produced a heart attack, physical sickness that qualified for tax free treatment. In another case, stressful conditions made a worker’s pre-existing multiple sclerosis worse, and that too was considered tax-free physical sickness. Former President Obama once suggested that PTSD may be physical too.
Is the Weinstein tax a plaintiff or defendant?
The Weinstein tax was supposed to punish the defendant, not the plaintiff. There has been a lot of tax worry about this. But fortunately, the IRS has posted an FAQ on the IRS website giving notice that it has fixed this problem, even if Congress can't seem to. The IRS asks this Question: "Does section 162 (q) [the Weinstein tax] ...
Do plaintiffs have tax problems?
Of course, plaintiffs still have tax problems. After all, just about everything is taxed. Sexual harassment might be verbal, physical or both, and it might impact victims in a variety of ways. The tax treatment of litigation damages is varied and complex. But the rule for compensatory damages for personal physical injuries is supposed to be easy.
Can you deduct attorney fees for a settlement?
Answer: "No, recipients of settlements or payments related to sexual harassment or sexual abuse, whose settlement or payment is subject to a nondisclosure agreement, are not precluded by section 162 (q) from deducting attorney ’s fees related to the settlement or payment, if otherwise deductible.".
Why is the process of reporting workplace harassment and discrimination described as designed to protect harassers rather than the abused?
The current process through which an employee reports workplace harassment and discrimination has been described as designed to protect harassers rather than the abused, in part because it is shrouded in secrecy. The Congress has taken some steps to reform its approach to sexual harassment in the post-Weinstein era.
How much was the 2013 disability claim settled?
Other claims that were settled between FY 2013 and the present include an age discrimination claim that was settled for $76,000; a disability discrimination and retaliation claim that was settled for $37,250 ; a $5,200 settlement for alleged discrimination on the basis of race, national origin and military service; and a veteran status discrimination claim that was settled for $150,000.
Did John Conyers pay a settlement?
John Conyers also admitted to paying a settlement after a former staffer alleged she was fired because she turned down his sexual advances. In that case, which was first reported by BuzzFeed, the money came from Conyers’ office budget and not the Office of Compliance fund. The Committee on House Administration review comes amid a growing call ...
Did the Office of Compliance pay for Massa?
These details come just a day after ABC News reported that the Office of Compliance paid nearly $100,000 to settlement a sexual harassment claim made against former Democratic Rep. Eric Massa. Massa resigned amid an ethics investigation in 2010, so it is unlikely that his settlement was included in the data released on Friday. Rep. John Conyers also admitted to paying a settlement after a former staffer alleged she was fired because she turned down his sexual advances. In that case, which was first reported by BuzzFeed, the money came from Conyers’ office budget and not the Office of Compliance fund.
How many of the settlements were sexual harassment-related?
It’s not clear. Speier told CNN’s Wolf Blitzer on Wednesday that the 260 settlements represent those related to all kinds of complaints, including sexual harassment as well as racial, religious or disability-related discrimination complaints. The OOC has not made public the breakdown of the settlements, and Speier says she’s pursuing other avenues to find out the total.
How much did Congress pay for settlements?
Story highlights. Between 1997 and 2017, Congress paid $17 million in settlements. The money comes from a fund set up to handle settlements within the US Treasury.
Who knows about the settlements and payments?
After a settlement is reached, a payment must be approved by the chairman and ranking member of the House administration committee, an aide to Chairman Gregg Harper, a Mississippi Republican, told CNN.
What do these settlements tell us about the scope of the sexual harassment problem on Capitol Hill?
However, even knowing that dollar figure doesn’t quantify the problem: a source within the Office of Compliance tells CNN that between 40 and 50% of harassment claims settle after mediation – an early stage in the multi-tiered reporting process.
Why are OOC statistics not broken down into specific claims?
In its latest disclosure, the OOC said that statistics on payments are “not further broken down into specific claims because settlements may involve cases that allege violations of more than one of the 13 statutes incorporated by the (Congressional Accountability Act).”
How much has Paul Ryan paid out in sexual harassment?
Here’s what we know – and what we don’t know – about that money: According to a report from the Office of Compliance, more than $17 million has been paid out in settlements over a period of 20 years – 1997 to 2017.
Is Ryan's office conducting a full review of workplace harassment and discrimination?
When asked about Ryan’s knowledge of any sexual harassment settlements, a spokesperson for Ryan’s office noted that the committee is conducting a full review of workplace harassment and discrimination.
How many agencies are able to provide dollar figures detailing the cost of payments related to sexual harassment claims?
Just two agencies were able to provide dollar figures detailing the cost of payments related to sexual harassment claims.
How many sexual harassment complaints were filed in 2017?
Department of Homeland Security data show that there were 42 formal complaints about sexual harassment in fiscal year 2017. But DHS says it doesn’t have public data outlining how much money the government paid to settle those claims.
How long does it take to file an EEOC complaint?
If that doesn’t resolve the issue, an employee can then file a formal complaint, which could trigger an investigation that must wrap up within 180 days. After the completion of the investigation, the employee can either allow the agency to issue a decision or request a hearing with an EEOC administrative judge. Only after the administrative complaint process is complete can an employee file a lawsuit.
Is the sexual harassment system opaque?
Despite a 2002 law aimed at improving federal accountability in discrimination cases, the system for tracking sexual harassment payments in the executive branch is almost as opaque and bureaucratic as the one governing Congress, where payouts similarly lack transparency — a setup that obscures the extent of workplace problems and allows for little oversight of how taxpayer money is spent, according to a POLITICO analysis.
Which agencies did not respond to the POLITICO inquiry?
The Office of Management and Budget, the Environmental Protection Agency, and the departments of Education, Transportation, Energy, Commerce and Justice did not respond to POLITICO’s inquiries before publication.
Did the EEOC respond to the POLITICO question?
EEOC did not provide a formal response to POLITICO’s questions.
Which party has introduced legislation that would require disclosure of more information about the fund’s settlements?
House and Senate Republicans have introduced legislation that would require the disclosure of more information about the fund’s settlements.
Who is the sponsor of the sexual harassment and discrimination resolution?
Comstock, sponsor of a resolution targeting sexual harassment and discrimination that has attracted broad, bipartisan support, said she expects the House to adopt it.
How long does it take to get sexual harassment training?
Meanwhile, the resolution stipulates that lawmakers and employees complete training regarding sexual harassment within 90 days of the start of a one-year session. New employees must complete the training within 90 days of their hire date.
What does Comstock say about misconduct?
While it may be challenging for Americans inside and outside Congress to come to terms with misconduct that involves public officials who agree with their political views, Comstock said, the safety and well-being of employees should be paramount.
What is the Office of Compliance?
The Office of Compliance is charged with advising members of Congress, congressional staff, and visiting members of the public on their rights and their responsibilities in the workplace setting.
Why is the settlement fund used?
Morgan, the organization's director of external affairs, said the settlements fund appears to be used to insulate Congress from much-needed accountability and transparency.
Can Congress pay for sexual harassment?
In the event of a monetary settlement of sexual harassment complaints , members of Congress can draw on a taxpayer-funded account set up within the Treasury Department to cover their legal expenses and settle cases .
Who was the woman who accused Franken of sexual harassment?
Another woman, Lindsay Menz, said Franken groped her while having his photo taken with her at the 2010 Minnesota State Fair.