Legal Question in Employment Law in Maryland

Re: Repayment of an employment sign on bonus

There is nothing specifically illegal about this. It is simply a quirk of the tax law for which your employer is not responsible.

However, you could try to make a contract argument along the lines that the contract turned out to be unconscionable or inequitable, or that your employer is being unjustly enriched because they will receive back more than they paid. (The final calculation would depend on how they pay their taxes.)

Under those types of equitable arguments, you might be able to breach the contract. But there is no way to know for sure unless you refuse to pay, they sue you, and the court makes a decision.

Also, I imagine if you refuse they will try to withhold the money from your final pay. You might have to then sue them. Neither lawsuit is desirable, especially not over a relatively small sum (compared to the cost of litigation).

The best bet is to try to negotiate. Raise the issues above - particularly that the employer would be getting back more than they paid, adn also that you have worked two more months than the 6 month minimum. If you only have to work one year in order to keep the full amount, perhaps you could negotiate to pro-rate it. Or perhaps you could do extra work to help the employer before or after you leave in return for keeping the full amount. Try to be creative and see if you can work something out. Remember to be reasonable and stay on the high road at all times. If you get frustrated or mad, chances are negotiations will fail.

Keep in mind, also, that your final tax will be less than the 50% you have paid so far. It will balance out once you do this year's taxes.

Good luck and feel free to call if you want to talk this through (for free) or if you feel you need to hire an attorney.

Jeff Sheldon

Jeffrey L. Sheldon, Esquire

The Sheldon Law Firm

6932 Mayfair Road

Laurel, MD 20707

301.604.2497

fax: 301.776.3954

[email protected]

http://www.SheldonLawFirm.com

Disclaimer: This posting does not and is not intended to constitute legal advice. It is not confidential, nor is it privileged, and it does not create an attorney-client relationship. Please consult with an attorney for advice specific to the facts of your case.

Re: Repayment of an employment sign on bonus

If you signed an agreement that you would remit 75 percent unless you stayed a year then they have a legal right to this amount. Follow Jeff Sheldon's advice to try to negotiate a equitable settlement for the difference.

Taxes are not a matter of the contact unless there is a stipulation within the agreement. If the company underwithheld taxes then this is their problem. Make sure your taxes are correct and that you are not required to claim 1099 or W-2 wages for amounts that they did not pay. If you need a qualified accountant, I can refer you.

G. Joseph Holthaus

(410) 799-9002