Understand why severance pay to tenured teachers not considered FICA wages.
When talking about severance pay for tenured teachers the North Dakota State University v. US case is a very important case that distinguished payments to tenured employees from similar payments to at-will employees, finding that the former payments were for contract rights (in the nature of property) that did not represent wages. Unlike seniority rights awarded for past service, granting tenure created rights protected by law that extended beyond those of at-will employment. This video reviews this case and discusses why amounts received by tenured professors who relinquished their tenure rights under an early retirement program are not FICA wages.
Runtime: 7 minutes
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