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  • deductions California

    My Employer Has Decided To Take A Poll Asking All Employees To Vote Whether We Would Like Our Benefit Deductions Taken Out 24 Times A Year, As Opposed To The Current 26 Times. So The Last 2 Paychecks In December Will Have Nothing Taken Out, Leaving Us With More $$ For The Last 2 Checks. My Question Is, Can They Do That If The Employee Decliines? They Are Stating If 60% Or More, Agree And Vote Yes, Then They Will Change It. But What Happens If I Still Do Not Agree. I Want To Know If This Is Allowed???

  • #2
    I'm not completely sure, but if I were doing it, I would add a statement that if an employee quits during the year, they would get their excess benefit payment back.

    For example, let's say an employee quits at the end of the 48th week. They've already paid for 52 weeks of benefits, but only get to use 48 of them, meaning that they overpaid by 4 weeks worth of benefits.

    Of course, the amount going into a 401K account isn't a problem because that's the employee's anyway.

    A better way to do it would be to set up a savings account (either a real account or a paper account) where the excess (about 1/12 of each payment) goes into a savings account and then that money is used to make the last 2 payments so that it didn't come out of the employee's account.

    Frankly, it's a nice thought, but I think they're asking for more trouble than it's worth. OTOH, if you fight with them about it, you could lose your job over a relatively small amount of money.

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    • #3
      Yes, they can do it without getting the employee's "approval" or opinions at all. They're asking for an opinion and will go with the majority, which is perfectly legal. You can't always have everything exactly the way you want it.

      Actually, this is very easy to set up on an automated payroll system. I managed payroll for 10 years for a company that did this, and the employees loved the "deduction-free" checks twice a year.

      BTW, if you post again, please do not capitalize every word; it makes your posts very hard to read.
      Last edited by Pattymd; 01-21-2009, 03:17 AM.
      I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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      • #4
        Originally posted by Pattymd View Post
        Yes, they can do it without getting the employee's "approval" or opinions at all. They're asking for an opinion and will go with the majority, which is perfectly legal. You can't always have everything exactly the way you want it.

        Actually, this is very easy to set up on an automated payroll system. I managed payroll for 10 years for a company that did this, and the employees loved the "deduction-free" checks twice a year.
        As I said, it's a commendable thought, but in your system, what happens if an employee leaves during the year. Do they get their overpayment back?

        Comment


        • #5
          Actually, deducting the premiums over 24 checks is better. Why? Because the premiums are based on a monthly amount. You deduct one-half the monthly amount each paycheck. In the 3-paycheck months, you don't deduct from the third paycheck. You collect the full employee portion in one month, you pay it. Deducting from each biweekly (or weekly) paycheck 1/26th (or 1/52nd) of the annual costs NEVER comes out even (well, almost never).
          I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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          • #6
            Originally posted by Pattymd View Post
            Actually, deducting the premiums over 24 checks is better. Why? Because the premiums are based on a monthly amount. You deduct one-half the monthly amount each paycheck. In the 3-paycheck months, you don't deduct from the third paycheck. You collect the full employee portion in one month, you pay it. Deducting from each biweekly (or weekly) paycheck 1/26th (or 1/52nd) of the annual costs NEVER comes out even (well, almost never).
            But that leaves 2 issues:

            1. If you do it the way you describe, then the employees don't get the extra money in December (unless the 3 week month falls in December - which was the point in the OP's situation.

            2. Doing it your way, the amount paid is never in sync with the amount owed. If an employee leaves at any time during the year, they will have paid more than they actually owe (unless the 3 paycheck month is January and they leave at the end of January). Is this corrected at termination?

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            • #7
              No, it IS in sync with the billing, that's exactly the point.

              Let's say the coverage costs $100 per month and it's all employee-paid (for purposes of simplying the math). That's $2400/yr. Deducting EVERY biweekly paycheck would be $46.15 per paycheck. In the 2 paycheck months, you've deducted $92.30, so you are $7.70 short to pay the bill. In the 3 paycheck months, you've deducted $138.45, so you are over $38.45 to pay the bill.

              If you deduct over 24 paychecks, you would deduct $50 per paycheck and every month, you've deducted $100, which is exactly what the coverage costs.
              I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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              • #8
                Originally posted by Pattymd View Post
                No, it IS in sync with the billing, that's exactly the point.

                Let's say the coverage costs $100 per month and it's all employee-paid (for purposes of simplying the math). That's $2400/yr. Deducting EVERY biweekly paycheck would be $46.15 per paycheck. In the 2 paycheck months, you've deducted $92.30, so you are $7.70 short to pay the bill. In the 3 paycheck months, you've deducted $138.45, so you are over $38.45 to pay the bill.

                If you deduct over 24 paychecks, you would deduct $50 per paycheck and every month, you've deducted $100, which is exactly what the coverage costs.
                Yes, you're right. I was thinking more of the other situation (deduct a whole years' worth of benefits in the first 24 pay periods and then none in the last 2) and mistakenly applied the problem to your situation.

                Comment


                • #9
                  Originally posted by mistoffolees1 View Post
                  Yes, you're right. I was thinking more of the other situation (deduct a whole years' worth of benefits in the first 24 pay periods and then none in the last 2) and mistakenly applied the problem to your situation.
                  And I went back and read the original post again, and did see that you were right, the OP did say "the last two checks in December", so I apologize.

                  That's a stupid schedule; defeats the nearly the entire purpose of deducting over 24 checks instead of 26.

                  But, the legality of it doesn't change.
                  I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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                  • #10
                    How does this benefit my Co?

                    so if my company can legally do this, what is the advantage for them??? They have to be gaining something?

                    Comment


                    • #11
                      Originally posted by tamip288 View Post
                      so if my company can legally do this, what is the advantage for them??? They have to be gaining something?
                      The stated reason is that they are doing it as a favor to the employee so that the employee has more take home pay in December.

                      However, if they do not properly account for the money and reimburse people who leave early, they would also be keeping some benefits money they are not entitled to.

                      Let's say the employee leaves on Nov 30. The employer would have collected all of the year's benefit money (or, all but 2 weeks' worth, depending on the calendar), but would not be paying any benefits for December. If the company returns the overpayment to the employee, it's no big deal. If the company keeps it, the employee gets shortchanged (it might even be illegal, but I'll leave that to the legal experts here).

                      Comment


                      • #12
                        I really do NOT feel that this is a favor for the employee. They make it sound good, BUT something has to be gained for THEM. There is no way they are doing this solely for the employees benefit!~

                        Comment


                        • #13
                          Originally posted by tamip288 View Post
                          I really do NOT feel that this is a favor for the employee. They make it sound good, BUT something has to be gained for THEM. There is no way they are doing this solely for the employees benefit!~
                          I already told you the answer to that.

                          If, however, they are properly refunding excess deductions from employees who leave before the year is over, then maybe they ARE doing it solely for the employee's benefit. Maybe you haven't figured this out yet, but sometimes employers DO like to do things to make their employees happy.

                          Comment


                          • #14
                            well thank you for your opinion, however you do not need to be rude.

                            Comment


                            • #15
                              It doesn't make any difference what the "advantage" is whether you understand it or not. The employer is within his legal rights to make this change and he could do it without asking the employees' opinion.

                              And there would be reconciling issues either way (last 2 paychecks of the year, no deductions or deductions each and every biweekly check). The ONLY way there would not be reconciling issues is the way I described it earlier.
                              I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

                              Comment

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