Barclays satisfies $1.66M city assessment over wage taxes that led to lawsuits

WILMINGTON — Barclays US Consumer Bank has satisfied the city of Wilmington’s three lawsuits demanding nearly $1.7M in unpaid wage taxes.

“We have satisfied the request, and the assessment has been paid in full as of today,” said a Barclays spokesman. “We are not disputing the assessment. Unfortunately, we simply did not pay the assessment as quickly as we would have liked.”

Located on Wilmington’s Waterfront, Barclays US Consumer Bank is a top-tier credit card issuer that offers affinity and cobranded cards to airlines (e.g., American Airlines, jetBlue, Hawaiian, and Frontier) and retail brands including Gap, Old Navy, Barnes & Noble, Wyndham, and xBox.

The lawsuits, filed Dec. 26, sought $1.66 million, claiming Barclays refused to pay income and head taxes. In its filings, the city said it audited Barclays to determine whether employees paid the city’s 1.25% earned income tax and found they had not paid them from 2021 to 2023. Additionally, the city says Barclays failed to pay head taxes from 2021 to 2024.

Wilmington’s head tax charges businesses $15 a month for every employee working at a company over five people.

Earlier this week, the City issued a statement saying, “The City and Barclays had had brief discussions regarding amounts owed the City but were not able to resolve matters in a timely fashion, so the City filed legal action.”

Some city businesses have questioned the reasonableness of employees paying city wage taxes while working remotely during the pandemic. While Barclays says that’s not the case, the city does depend on city wage taxes to fund its annual budget. In its current budget, the city anticipates bringing in more than $68 million in such taxes, representing more than a third of its $181 million budget.

That said, more and more large employers- particularly financial institutions- are returning employees to the office.