Arbitration Award

[dd4525]

What is the name of your state? MICHIGAN

I was terminated from my employment in 2003. I filed a grievance with the union and was subsequently made whole by an arbitrator. The employer, which in this case, is the state of Michigan itself, is taking its time in giving me the back pay.
They are subtracting my unemployment benefits I received as well. This I understand and expected. My problem is they are subtracting the unemployment benefits from my net pay. I have already paid taxes on this amount and do not understand why or how I am getting taxed again. The labor relations people are vague on this and told me to get an accountant. They also keep prolonging the receipt of my back pay.
I returned to work but they wont let me do my old job and instead have stuck me at one they know I dont like. I will deal with that as long as I get my back pay. My question being are they time limited and can they double tax me on this?

 

[Beth3]

You really will want to discuss this with an accountant because the issue is one of how you file your taxes.

Only a very few and very specific types of payroll deductions qualify for "pre-tax" status; that is, being deducted from an employee's paycheck BEFORE taxes are calculated. Deducting unemployment benefits that were overpaid does not qualify. Assuming the UC income you received was taxable income and declared, then you should consult with a tax accountant on how to handle this - whether to file an ammended 2003 tax return or to handle this on your 2004 taxes.

As to how long they have to pay you the backpay you are due, I have no idea. I'd expect the arbitration agreement would have specified the terms of the settlement, including time limits.