Search the Community
Showing results for tags 'back pay'.
Found 2 results
-
I have a sponsor that changed payroll systems in 2021. As a result of that change , overtime was not calculated correctly in 2021 through 2023 for a group of participants. Sponsor self-discovered the error in late 2023 and paid this group of employees back pay on a separate 10/20/2023 payroll. The plan is a 401(k) deferral only plan covering only collectively bargained employees. The plan does not include an automatic contribution arrangement. According to their plan document, the back pay is eligible compensation/allocation pay. The sponsor did not take elective deferrals for this separate payroll. We didn't learn about this issue until after 1/20/2024. No notice has been provided to the affected participants. I'm trying to figure out if there is a way to turn this into a notice only or zero QNEC correction. My conservative view is that correct deferrals began with the payroll following 10/20/2023, which would have started the 45 day clock for a notice only correction. Thoughts?
-
Employer misclassified certain employees for FLSA purposes. So now back wages are being paid for overtime that was never paid during 2012-2015. It is not DOL or court-ordered back pay. Employer found the error on internal audit. Now it is correcting it itself. I have several questions: 1. For the payments that are made now (2015), should deferrals be withheld? And match be processed? The plan defines comp as W-2. 2. Is EPCRS correction triggered for the prior years? After all, the employees were not paid the proper amounts. This means that the employees missed a deferral opportunity and missed a match on the missed deferrals. Or is the payment of the wages (and liquidated damages) in 2015 enough that correction of prior years isn't needed? Thanks.
