Curious Employee

Thanks all for the information. I think I understand where I stand. I am not looking to sue my employer. I am a big boy and can deal with it. I just wanted to know if it was per se inappropriate to handle it the way it's being handled.

Forgive me for not responding immediately. I posted yesterday and checked the forum now and didn't receive any notifications. And for those who think I should have included several more pages of information in my question and/or understood all the nuances of the law, I'm not a tax or ERISA lawyer or I wouldn't need to ask. To respond to a couple of questions, I am a W2 employee. Of counsel means different things to different firms. My employment agreement provides that I will be receive an agreed percentage of my receipts, plus health insurance and similar standard employee benefits. It does not provide for a "total package" salary or compensation figure. It does not reference any right to reduce said compensation to account for benefits. It does not reference contributions to my retirement account or the Profit Sharing Plan. When the managing shareholder (primary owner of the firm) learned he had to pay 3% to me as an employee to maintain the Safe Harbor status, he said I have to pay it back. So the $500 per check (semi-monthly not weekly) is reduced from my gross compensation before taxes and categorized as a "loan" payment. Without divulging my annual income, I can clarify that I am not saying that continues throughout the year, just until the "loan" reimbursing the Safe Harbor contribution is repaid. So, yes I am directly funding the employer contribution.

I am an employee of a small law firm. I am "of counsel". 4 years ago, my employer complained that he had to make a Safe Harbor payment into the Profit Sharing Plan for me in the amount of 3% of my compensation. Since it was not addressed in my employment agreement, he pressured me to reimburse the 3% payment. Each year since I have done so, with $500 deducted from my pre-tax compensation calculation ever two weeks. To my knowledge, no one else at the firm has been required to do so but nearly all others are salaried employees. I am starting to think this practice violates the Safe Harbor rule and is not legal. That is, it seems this does qualify as a Safe Harbor contribution if the employer is reimbursed for the entire payment. Am I right? If so, what is the proper way to address it?