ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, January 1, 1996 TAG: 9601010005
SECTION: BUSINESS PAGE: A8 EDITION: HOLIDAY
COLUMN: Money Matters
SOURCE: MAG POFF
Q: When a settlement has been awarded in a suit for defamation of character, injury to reputation and slander, is it taxable?
A: A settlement in any suit for an injury is not taxable. The same is true of a jury award for compensatory damages.
The theory is that the money is designed to compensate you for the losses you received as a result of the injury. In your case, the injury was a damage to your reputation.
You've been had
Q: In February, we met a cabinetmaker and asked him to make the cabinets for our new home. Before starting the framing part of our house, we already had a verbal agreement with the cabinet man. In May we gave him a substantial check to cover the cost of buying the materials for our cabinets. In July, we told him that the contractor would need the cabinets Sept.1.
He has given us three different dates when he would deliver cabinets, but he has yet to show up or call.
Do I have any legal recourse, even though we don't have a written contract? His negligence in delivering my cabinets is costing me money each day he delays working.
A: The fact that the cabinetmaker needed money to buy materials should have been a warning about the man's possible financial troubles. You owed him only a small deposit up front, and you should have paid him as the work progressed. A subcontractor should be sufficiently well capitalized to buy his working materials.
It would also help your position if you had a legal contract showing the dates for performance of the job.
You cannot make him appear, short of going to court. He has little incentive to do the work - you have already given him a substantial check.
At this late date, and without a contract showing the dates for performance of the work, your options are limited. You should warn him by registered mail that you will hire someone else to do the work unless he shows up within five working days. Set forth the terms of your verbal agreement, and state how much money his failure to do the work is costing you. Keep a copy of the letter and postal receipt.
If he doesn't respond, carry through with your threat, then sue him for return of the money that you paid him. But the cabinetmaker may have so little money and so few assets that there is no way to enforce any judgment you obtain.
Next time, you must sign a contract and refuse to make a large payment up front.
401(k) laws complex
Q: Concerning 401(k) plans, I thought it was essentially set up for low- and middle-class people to contribute to their own retirement.
At the establishment where I work, they just hand it out to different people like those in the lab and the lead men and the foremen.
The people in production don't get a chance to contribute to their own retirement, much less get matching funds. I'm thinking this is illegal.
A: It's not necessarily illegal, according to Donald J. Potter Jr., president of Financial Strategies, a pension and investment consulting firm in Roanoke.
The laws are complex, he said, but they are generally designed to bar plans that cover only highly compensated employees and rule out other workers.
As a general rule, he said, no type of qualified retirement plan can discriminate in favor of highly compensated employees. Within the context of a 401(k) plan, he said, highly compensated employees cannot contribute too much more money than lower-paid workers can.
One large exception applies to hourly workers who are covered by a collective bargaining agreement through a union. Benefits for these employees are subject to negotiations with the union, he explained. It is definitely legal for a company to withhold a benefit that is not part of the union contract, and many companies do just that.
In some other cases, he said, it is permissible to stratify employees, giving a benefit to one group and not giving it to others.
He suggested that you approach the human resources department at your company to inquire about the reasons that your group does not have this benefit.
LENGTH: Medium: 81 linesby CNB