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It's been my experience that this depends on the settlement agreement which means you have to rely on legal counsel. Assuming there is a formal settlement agreement, it should reference the amount and rationale for the settlement and how/when it is to be paid - e.g. via payroll or direct payment, within 30 days, etc. I wouldn't make the decision on my own; seek legal counsel direction as your circumstances ...

Vickie: I am not sure what exactly the settlement is for, but I would lean toward it going through payroll. I cannot think of anything that I would pay an employee that would be on a 1099 and not running through payroll. The only items that we pay out to employees that don't run through payroll would be reimbursements of school related expenses. ------------------------------ William Blakely CFO/Treasurer ...

Hello all.. I am looking for guidance on how to pay a settlement agreement with an employee. Specifically, I am struggling with whether this needs to go through payroll (W-2) or if it should be done with a budgetary check and a 1099? I have never been faced with this situation before so any guidance would be greatly appreciated. Thank you! Vickie -- Vickie Browning-Prowitt ...