Employer deducting money from check-without "reason"

[Guest brink]

After Anthem Insurance Company demutualized last year, we received a check from Anthem for the cash out option. The employer pays 100% of the premiums for each employee.

The employer now feels entitled to the money that each employee received from Anthem. (Some of the employees that received money no longer work for the employer) Also, the employer received the exact same paperwork as each employee, therefor having notification of what was happening.

Six weeks ago, the employer sent out a memo to the employees stating that "while Anthem considers this money yours, you should feel morally obligated to pay it back to me"

As of 4 weeks ago, the employer started taking a $50.00/week deduction from each employee's paycheck to "reimburse" herself for this money. This deduction was not granted permission by any of the employees, nor is it a court ordered garnishment-meaning she just started taking the money because she wanted it.

Each employee was required to include the money in the 2001 taxes, being issued a 1099misc. form. The employer has no intention of filing her "reimbursement" in taxes, nor is reimbursing each employee for the amount of taxes they paid on the money.

Legally speaking, we were told that the money belongs to us because there is no retirement fund offered. According to the letter sent by Anthem along with the check, the money was to go directly to the employee or to the employee's retirement plan. That's basically how we ended up with the money.

We were told that the deduction of the money from the paycheck

was a violation of the ERISA Act and that we would need to have a Declaratory Judgement entered.

Could anyone please explain this-and possibly offer any additional options to go back after this money? We are now finding additional employees willing to step forth and join the effort to stop the "illegal" garnishments.

PLEASE HELP!!!!

[david rigby]

May be unlikely that any employer can deduct from a paycheck without proper authorization. Perhaps your state agency can help.

http://wagehour.bes.state.oh.us/w3/webwh.nsf

[mbozek]

Need more Facts: What kind of policy coverage was this: health, retirement? Why was refund issued to employees if employer paid for permiums? Generally in demutualization, surplus goes to policyholder of record. Was this coverage for individual health insurance insurance paid by employer?

There maybe issues under state labor law (OH?). While employer must pay wages to employee, employer could alway change employees rate of pay if there is no written contract.

[Guest brink]

Well, more information was discovered yesterday. Apparently, according to the employer, in order "to receive the covereage we received" she opted to take individual policies for each employee. I'm not really sure why she did this. (This is health insurance). So, supposedly that being the reason, each employee therefore became a "member" or "individual policy holder" as if we had taken the policy out on our own. This is why the employer feels entitled to the money.

In my opinion, she chose to set up the policies this way, and therefore is not entitled to anything.

I have also been through the US Labor Dept, the IRS, the Employment Bureau, and the State's Attorney General's office and NONE have been any help at all. They just tell me that yes, indeed, taking the money out of the employee's checks is wrong, but they can't help. URGH! Government! They are no help at all!!!

We have contacted a lawyer and have found out that we would have to do a "Declaratory Judgement" against her and the cost would be $2500.00. We have one other couple interested in doing this with us, but are hesitating because A.) the money involved, and B.) my husband will more than likely be "starved" out of a job. The dispatcher is already "starving" the other employee (the one who is willing to go after her with us) and we can't afford to be unemployed or starved at this point.

[mbozek]

Brink: I sympathize with your situation but I do not know whether you will be able to get a favorable result if there is no statutory prohibition against the employer reducing your pay. The reason the bureaucrats cant do anything is because there is no prohibition against an employer changing an employee rate of pay. The question is whether reducing your pay because of a benefit you receive under an employer health plan is prohibited retaliation under Section 510 of ERISA, the federal pension law. The answer will be up to a judge to decide the case without a jury in federal court.