severance and payout

UPDATED: Oct 1, 2022

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severance and payout

A contract signed at the beginning of salaried W-4 employment and one item that severance would be paid for 9 months. Upon separating from employer, the employer advised the HR person to pay severance as a 1099-contractor. The position held was VP Of Operation. They of course benefit from not paying the SS and Medicare portion of the payments and do not withhold taxes. There are 2 people who are being paid this way, and never agreed to the 1099 contractors. Do we have to accept this type of payment 1099 and, if not, we would we contact as no one seems to have this under their umbrella of oversight.

Asked on July 8, 2019 under Employment Labor Law, North Carolina


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

If you were employees, not 1099 contractors, your severance should have been paid as any payroll to employees--that is, with the proper withholding and employee SS/Medicare contribution.
However, there is no agency that will resolve this for you: you'd have to file your own lawsuit against your now-former employer. You need to decide if it is worth your time and money to go to court over this.

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