Employee Profit Sharing Plan Rules
Profit sharing plans are incentive programs offered by a business to employees who rely on the company’s profitability. With so many profit sharing plans available, many people may have legal questions on about profit sharing laws and how profit sharing programs work. Employment Lawyers on JustAnswer can answer any question that you may have regarding profit sharing plans. Below are five of the top profit sharing questions answered by the Experts.
How long can a employer keep a 401k or profit sharing plan after an employee has quit or been fired?
All profit sharing plans and 401K’s are governed under the Employment Retirement Income Security Act (ERISA). You will need to contact your plan’s administrator to determine what the open period is for your plan and when disbursements are made. Each plan usually has a set open period that allows disbursements to be made to employees who no longer work for the company. When you find out about the open period, you will have to file a request for disbursement. This can be done without contacting the former employer, just by looking at your plan and determining who to contact. Usually, all contact information can be found in the plan material you would have been provided at the time of getting into the plan.
If an employee is partially vested in a company and is terminated, do they receive anything from profit shares?
If you are an employee and are partially vested, then you should normally receive the amount that you have accumulated up to the time that you were terminated. You should also review your plan for rules pertaining to profit sharing and termination. Usually, the only way an employee would not receive a percentage of the employer’s investment in the profit shares would be if they are not vested at all.
In Indiana, can an employer deny an employee profit shares if the shares were part of a compensation package?
In general, an employer cannot withhold any part of an employee’s compensation package. If this happens, you need to file a complaint with the labor board. If the labor board is unable to assist you, you may want to retain an employment lawyer. An employment law attorney can write a letter to your employer demanding that you be compensated or legal action would be taken. Generally, the labor board or a letter from an attorney is enough to make an employer comply and distribute the funds that you are entitled to. If you still have issues receiving your money, you could always sue the employer in small claims court. Of course, you would want to make sure the amount of money owed to you is worth a court hearing.
If an employee is qualified for profit shares and the employer refuses to pay stating not enough hours have been worked, what can the employee do?
If your employer is saying that you have not worked enough hours to qualify for profit sharing, you need to obtain a copy of any logged hours, such as a copy of your time sheet and see if the hours are qualified in some way. If the hours you have worked are actually qualified hours, you could demand payment or if necessary, take the employer to court and sue for the amount. Your employer may decide to terminate you in response to your demands. If the employer does terminate you, you can then sue for wrongful termination and retaliation.
In the state of Florida, can an employee opt out of a profit sharing plan or are they required to take it?
The rules in the Employment Retirement Income Security Act (ERISA) must operate within a set of IRS non discrimination rules. Due to very strict coverage rules that are enforced to prevent discrimination within profit sharing plans, you may be limited in opting out unless you fall under ‘exclusion’. With so many different profit sharing plans available, you need to examine your plan to see what the exclusions are and if you would qualify for one.
There are so many legal questions that can arise when discussing 401K profit sharing or other profit sharing plans. Whether you’re an employee trying to decide the best way to handle an issue with a former employer who is withholding profit shares, or an employer trying to decide which plan would be best for your company, Employment Lawyers on JustAnswer can help you with these questions. The Experts on JustAnswer answer a wide variety questions about profit sharing and can give you answers to your questions in a fast and knowledgeable manner.