When you receive a settlement that includes physical injury damages awarded, how should an employer disburse the funds since it's nontaxable? Thanks.

Don't be so sure that physical injury damages are non-taxable. It's not that simple. Speak with a tax lawyer or a certified public accountant about your specific facts and how much money was spent on medical expenses directly related to the claim before deciding. Unless one of these tax experts confirms that a portion is non-taxable assume that all of it is taxable. Most employment law settlement proceeds are taxable. It's rare for it not to be.