Personal Finance

I thought I was contributing to my 401k but I found out my boss has just been taking the money - what should I do?

Aaron Webber

Published: December 14, 2024 9:30 am

The modern relationship between employer and employee is a fertile ground for exploitation. As our elected officials roll back and repeal existing regulations, these relationships evolve ever more to resemble the feudal agreement of the Middle Ages, leaving employees vulnerable to the evil whims of their employers.

24/7 Wall St. Key Points:

• You should always contact the DoL and an ERISA lawyer before doing anything else.
• Employers have the incentive to scam and manipulate you, don’t give them the benefit of the doubt.
• Also: Take this quiz to see if you’re on track to retire (Sponsored)

One particular person has suffered from one such whim, and took their frustration and grievances to the people on r/legaladvice to ask them about what their options are going forward and what they should do.

Please remember, the advice on the subreddit and in this article is not legal advice, and you should always speak with a real lawyer before taking any action yourself.

The Question

The author of the post in question says they have been depositing a portion of their paycheck into the company-sponsored 401(k) since 2022. They recently checked the account and saw that their employer had been withdrawing the money but not depositing it into their account since January 2024. In 2023, they had deposited the money in six-month intervals.

After talking with other employees, 13 others confirmed that they had seen the same thing.

The author immediately contacted their employer asking for answers and requesting that any contributions be halted immediately. The employer responded by saying they were unaware people were contributing and that there was an issue with the account. The employer said they would deposit the missing money by the end of the year, but the employees have no confidence that it will happen. Now, they are looking for legal advice.

The Community Response

As with any legal topic online, there was a wide variety of advice, some good, and some terrible. However, there is only one real course of action left to the employee: contact and enlist the services of an ERISA lawyer and contact the Department of Labor immediately.

The website for the Department of Labor has answers for many common legal issues that American workers face on a regular basis. If you try to solve these issues yourself, you open the possibility for retaliation, legal problems for yourself, and muddying the waters of an investigation that can prevent you getting the resolution you want.

Some users recommended making physical copies of pay stubs and other forms, some recommended they look for a new job, and other things. Which might be good advice, or it might be a waste of time, an ERISA lawyer would know the difference, which is why the best (and only) advice is to contract one as soon as possible so they can tell you what you should be doing in order to maximize your benefit and minimize your problems.