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California medical deductions / no pay stubs illegal? California

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  • California medical deductions / no pay stubs illegal? California

    My employer had an existing insurance policy with a $10 copay that he provided. About a year after going on the policy he told us he was going to start taking out $40 a week out of our paychecks to cover the medical policy and that it was $40 a week or no insurance. We never signed anything (that I remember) or were shown policy options or any information on the premium cost. I never recieved pay stubs and was never shown if it was pre tax or after. A couple months after he started the deductions we discovered he changed the policy. Our copay changed to $50 dollars a visit and prescriptions had also gone up without our consent or approval. As I have a case against him with Ca labor Commissioner for taking other deductions and not reporting them, can I claim the medical as an illegal deduction?

    I was also wondering if anyone knows about no pay stub penalties (code 226)- do I need to use small claims?

  • #2
    Your employer doesn't have to have your approval to make changes to your health care benefits (premiums, deductibles, copays etc). He offers whatever he can find/afford, etc. He doesn't have to offer more than one option and in most cases doesn't have to offer any plan at all. He doesn't have to tell you the total cost of the premium and what portion he is paying vs what portion you are paying, unless you go on COBRA and then you (usually) pay 100% and that's one way to know the true full premium. Many small business plans are required by the carrier to pay at least a certain percent (ours is 50% employee coverage).

    That said, each year there should be an "open enrollment" period where you can make changes (add/drop, etc). During that period usually the employees are told of any changes so they can make that decision. If it is a pretax benefit, then changes can only be made during open enrollment or a "change of status" which are very specific events like birth of a child, loss of other coverage, divorce, marriage death, etc. And even then must be done within a very specific time frame.

    A good HR/payroll dept would have you sign a deduction authorization anytime you make a change. However if you have an electronic computerized enrollment process (possibly through the insurance carrier or a third party administrator), you might be signing/acknowledging somewhere that you don't realize. Or if you ever signed the authorization it might have language that allows for changes to the plan without a new signature required unless explicitly told to cancel the authorization.

    I am not sure whether or not you have to actually sign a deduction form in your state. It is good policy to do so, but not always required, especially for something that is for the employee's benefit (rather than the employer's). I looked it up and this is what CA has to say:
    "An employer can lawfully withhold amounts from an employee’s wages only: (1) when required or empowered to do so by state or federal law, or (2) when a deduction is expressly authorized in writing by the employee to cover insurance premiums, benefit plan contributions or other deductions not amounting to a rebate on the employee’s wages, or (3) when a deduction to cover health, welfare, or pension contributions is expressly authorized by a wage or collective bargaining agreement. Labor Code Sections 221 and 224"

    Even if you have never signed an authorization, you got the benefits of the deduction (that is health care insurance coverage), so I am not sure what if anything would be recoverable if you tried to make a claim. But hopefully DAW will stop by and add more because he is much more familiar with CA than I am.
    Last edited by hr for me; 11-28-2012, 06:27 AM.

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    • #3
      http://www.dir.ca.gov/dlse/FAQ_Deductions.htm

      An employer can lawfully withhold amounts from an employee’s wages only: (1) when required or empowered to do so by state or federal law, or (2) when a deduction is expressly authorized in writing by the employee to cover insurance premiums, benefit plan contributions or other deductions not amounting to a rebate on the employee’s wages, or (3) when a deduction to cover health, welfare, or pension contributions is expressly authorized by a wage or collective bargaining agreement.
      "Reality is that which, when you stop believing in it, doesn't go away".
      Philip K. **** (1928-1982)

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