Appellate Court Reverses Ruling in PEDA Benefits Case
Former employees sued a City claiming it unlawfully withheld employment taxes and compensatory time from benefits they received pursuant to the Public Employee Disability Act (PEDA). PEDA provides benefits to certain eligible public employees who are injured in the line of duty for a period of up to a year. The trial court ruled in favor of the employees, but on appeal, the Illinois Appellate Court reversed and sent the case back to the trial court for further proceedings. Bitner v. City of Pekin.
The employees claimed, among other things, that the City violated the Illinois Wage Payment and Collection Act when it withheld employment taxes from their PEDA benefits. On appeal, the Appellate Court determined that the City did not violate state law when it withheld employment taxes from benefits the employees received under PEDA. The Court referred to express language in PEDA that provides that an employee receiving PEDA benefits is to be paid on the same basis as the employee was paid before the injury (see below):
Whenever an eligible employee suffers any injury in the line of duty which causes him to be unable to perform his duties, he shall continue to be paid by the employing public entity on the same basis as he was paid before the injury, with no deduction from his sick leave credits, compensatory time for overtime accumulations or vacation, or service credits in a public employee pension fund during the time he is unable to perform his duties due to the result of the injury, but not longer than one year in relation to the same injury.
Based on the Court's interpretation of this language, the City was not prohibited from deducting employment taxes from the PEDA benefit payments because there was no express mention of employment taxes or tax withholdings in the list of prohibited deductions (which referenced compensatory time and service credits but not taxes).
The Court did remand the case back to the trial court to look further into the employees' claims that the City wrongfully deducted compensatory time from the PEDA benefit payments.
Post Authored by Alexis Carter & Julie Tappendorf, Ancel Glink
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