(Washington, DC) - Yesterday, Representative John Lewis (D-GA) and Senator Ben Cardin (D-MD) introduced the Civil Justice Tax Fairness Act of 2013 (CJTFA). One of the National Employment Lawyers Association's (NELA's) top legislative priorities, the CJTFA, previously titled the Civil Rights Tax Relief Act (CRTRA) in prior Congresses, would end unfair taxation of settlements or awards received by individuals in employment cases brought under civil rights and worker protection laws. The bill numbers are H.R. 2509 and S. 1224.
Mr. Lewis is joined by a bipartisan group of original cosponsors, including fellow Ways & Means Committee member Aaron Schock (R-IL) and Judiciary Committee members Jim Sensenbrenner (R-WI) and Bobby Scott (D-VA). Senator Susan Collins (R-ME), the longtime original cosponsor of this legislation, joined Senator Cardin, a member of the Senate Finance Committee, in introducing the bill.
The CJTFA would end two inequities in the tax code affecting settlements and awards in employment and civil rights cases: (1) taxation of lump sum payments of front or back pay at artificially high rates; and (2) taxation of non‐economic damages, which compensate people for pain, suffering, and related health effects. Since the enactment of the Small Business Job Protection Act of 1996, non-economic damages recovered in cases that do not arise from a physical injury-including employment cases brought under civil rights laws and other worker protection statutes-became taxable.
In applauding Representative Lewis, Senator Cardin, and their colleagues for championing this important legislation, NELA President Patricia A. Barasch said, "There is no rational justification for the current tax policy that treats workers who suffer violations of their employment rights differently from those who recover non-economic damages for a personal injury. Eliminating this inequity in the tax code has had overwhelming bipartisan support in Congress and equally strong support from the civil rights and business communities since the late 1990s. As Congressman Lewis says, 'let's get this done!'"
In October 2004, with NELA leading the legislative effort, the CRTRA provision ending double taxation of attorneys' fees in employment discrimination, civil rights, and other workplace cases was passed as part of the American Jobs Creation Act of 2004.
For more information on the Civil Justice Tax Fairness Act, visit www.nela.org/taxfairness.
The National Employment Lawyers Association advances employee rights and serves lawyers who advocate for equality and justice in the American workplace. NELA provides assistance and support to lawyers in protecting the rights of employees against the greater resources of their employers and the defense bar. It is the country's largest professional organization exclusively comprised of lawyers who represent individual employees in cases involving employment discrimination and other employment-related matters. NELA and its 68 circuit, state, and local affiliates have more than 3,000 members around the country.