Search This Site.

Reductions in hours or voluntary quit due to "theft" of 401(k) contributions from paycheck

by Jessica
(California, USA)

I have worked for the same company in California for 9.5 years. I recently moved 1.5 hours away due to housing/financial issue at current residence, moving in with family member to help take care of her (medical issue with Doctor's note requiring a "care giver"), and financial/housing assistance from family member. My employer agreed to allow me to work remotely but with reduced hours. I went from 40 hours a week to 20 hours a week. It has been 3 months under this arrangement and the CEO of the company informed me via telephone that he wants me to work on a case by case basis now, as in only when tasks are requested. Last week I worked 4 hours as the company is struggling and there isn't much activity. That is not enough hours for me. Another concern I have is health insurance. At 20 hours a week, I still qualified to maintain my health insurance but I will lose this if I drop below 20. The CEO said that my benefits will only be cut once it is reported that I dropped below 20 hours but that it is unlikely that it will be found out and I can keep my health insurance until it is discovered. I'm not entirely sure who the authority is in determining whether I can keep my benefits or not, but the fact that officially I do not qualify and they can be dropped at any moment has me very concerned.

One of my coworkers put in her 2 week notice and recommended me to take over many of her tasks that can be handled remotely. My supervisor thinks it is a good idea for me to take over these tasks, but the decision does not rest with her. I emailed the CEO formally requesting to be given these tasks as well as requesting to at least be allowed to work 10 hours a week to prevent financial hardship. It has been a week and I still have not received a response. I sent a follow up asking if he's considered my request. The company has been struggling financially (many employees are owed significant amounts of backpay) for several years. Will I qualify for CA Unemployment due to a significant reduction in hours?

On another note, I would also like to find out about my options under a voluntary quit situation. As I mentioned previously, the company has been struggling financially. A couple months ago I received a call from the company that our 401(k) is with and they told me that there was not enough money in my account to make the scheduled purchase that takes place every month (and has taken place every month since I started there). I was informed that no deposits had been made into my 401(k) account in months. I texted my
supervisor and our HR Person and they spoke with the CEO. He has been deducting money from our paychecks for our 401(k) but using that money to pay other company liabilities instead of depositing this money into our account. This is of course illegal. It is June and the last deposit into my 401(k) was in January. As of June 15th, all 401(k) deductions were stopped but there is still several months of 401(k) money due to us that was taken and not deposited without our permission. I was informed that the amount is around $40,000 total.

I spoke with the CEO on the phone (no evidence of our conversation) and he said he is working on it and will pay the money back when he can. I have an email from HR listing the amounts that they owe me per a request that I made. It is an insignificant amount, but it is the principle of the matter. This is one of many shady practices the company engages in, but this is the one that effects me personally. Ethically, I disagree with many of their practices, including lying to customers about delivery dates (taking payment and not providing goods going on 3 years now), missing paychecks for some employees, only paying partial paychecks for others, etc.

Is this justification for quitting with good cause to receive unemployment benefits? Which is the best option to go with? I have been too scared to quit because I don't want to be left with no income at all while I am trying to find a new job.

Which Reason Do You Think Looks Best?

Being justified to quit an immoral, or amoral employer, is simply put, not the same thing to me, as voluntarily quitting a job with proof of good cause, so one can also collect unemployment benefits.

Here's what I think Jessica. No matter which reason I think seems best to me at this moment, it's you, not me, responsible for determining which reason gives you the best shot at quitting and then proving good cause. Quitting and collecting isn't about what reason would suit you best .. personally, but which cause presents less stumbling blocks after you finally apply for unemployment.

To eliminate, or rate your success chances for being found to of HAD quit with good cause, I think anyone currently still working in California, (albeit not under the same terms and conditions I'm clueless as to whether you can prove as fact, or not), is to first peruse the California Unemployment Benefit Determination Guide (UIBDG) for relevant good cause to quit reasons.

And when you have eliminated all you assess as having too many potential stumbling blocks, then tell me what you can prove .. and what you can only talk about as being some sort of proof for an unemployment hearing.


Click here to post comments

Tell us your unemployment story! It's easy to do. How? Simply click here to return to Employees Working Smarter.

} }