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Statute of Limitations: Repaying Sign on Bonus in Texas

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  • DAW
    replied
    Hard to say. "Conditional wage payments" are a subject not well discussed in law. The feds have very little to say on the subject at all. IRS has rules on how errors are corrected, and in the absence of other rules, these are basically just error corrections as far as IRS is concerned. This was a valid wage payment when it was made, it was a valid wage payment the day before you quit, but the day you quit the employer "discovers" that they made a payment error. Right.

    Very briefly, for IRS only, if the wage re-payment occurs in the same year, it should happen net (employer adjusts taxes), but if it happens in subsequent years, then it happens gross and the employee basically has to refile 1040s (yuck). TX has no state income tax, so not an issue there.

    Past that point however is the 800 pound gorilla in the room. Basically we are not (mostly) talking about labor law at all, but rather contract law. The employer is basically claiming (correctly or not) that they have a legally enforceable contract saying what you just said. The only way to verify that is to have a local attorney review the claim. Past that, your state is not my state. Generally speaking, states have one set of rules for payroll deductions (as do the feds), then potentially an entirely different set of rules for claims in courts. And I have never had a reason to learn either set of rules for TX. I do know that states can and do have very different rules in this area. Conditional wage payments are one of those things that many people do but pretty much no one actual understands. Sort of a "if I cannot find an actual rule then anything I do must be correct" situation as far as the employer is concerned. More accurately it is more of a "no actual rule, so anything the judge-du-jour says, goes". Wheel of Fortune time.

    I can cite the federal deduction rules, but they will not help.
    http://www.dol.gov/whd/regs/compliance/whdfs16.pdf

    I can probably find the IRS rules if I looked long enough on the Internet, but I normally just get my copy of The Payroll Source book of the shelf and look it up.

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  • Statute of Limitations: Repaying Sign on Bonus in Texas

    I cannot seem to find anywhere online about this..I recently quit a job that I received a $2000 sign on bonus for. If I stayed for one year, I paid back half and 2 years nothing. I quit after several months because the job was deplorable and misrepresented the physical aspect (which I could not perform versus what I was told in my final interview). My biggest question is: How long do they have to collect the $2,000 back from me before it expires? Also..do I have to pay back the full amount and deal with the taxes taken out when I deal with taxes or what? Thanks!!
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