Legal Question in Business Law in California

I started working for a company June 2008. This is a very large global company and has several offices. Most of the employee resources are found online. When I started, instead of going through typical new hire orientation, I was left to find the information online. At that point in time, I really didn't need much but a paycheck from work. I tried to decline all benefits so I could rely on my wife's company which provided better coverage. I thought all was fine. 8 months later, when the economy took a dive, the company announced several pay cuts. I get my paycheck stubs sent to my house but the company also has a way to view them online. When the pay cuts went into effect, I went online to see the difference. When I viewed my paycheck, I saw the company was taking out a 401K deduction. The paychecks that are sent to my house do not show this deduction. We do have a person in the office we can speak to about HR issue and she was unaware of any 401K auto-enrollment. I tried searching online and couldn't find anything about 401K and auto-enrollment. I finally found a number to call and asked them to stop the deduction. I have also tried to get my funds back but told that is not possible while I still work for the company. I have read about 401k and auto-enrollment. The law states that employees are to be notified and it should be easy to opt-out. Based on the lack of knowledge by my local HR person and information on the intranet. And the fact the information was concealed on my paystub, I would think I would have a case. Is it worth it to try to fight this issue. The amount at that time was around $900 dollars. Today the total is $1300.


Asked on 11/18/09, 2:09 pm

2 Answers from Attorneys

If they've stopped the deduction, and since the money is still yours, and since you got a tax benefit from it, I would suggest you drop it, move the money to an IRA when you leave the company, and take a vacation with it when you retire. It will be far more trouble than it could ever be worth to fight it. If they have not stopped it and/or refuse to stop it, then you should contact an attorney. There are probably other employees in the same boat and this might qualify as a class-action if your company is that big. Of course the fact of the matter is, unless you are desperately cash-strapped, or have huge high interest debt that you would ACTUALLY pay down with the money, you are almost invariably ahead if you participate in your company's 401k. So they may be doing you a favor.

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Answered on 11/23/09, 2:28 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

I agree with Mr. McCormick. If I understand your information properly, you already have a nice profit on this 401k. Maybe you should reconsider and participate. In any event, if you like your job and want to keep it and get promoted, etc., avoiding clashes with your boss or the HR department would seem to make sense.

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Answered on 11/23/09, 4:30 pm


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