Q: Can a corporation retrospectively cancel their promised 401k match contribution.
I am an employed physician of a large health system in NE TN. Because of financial losses they are having due to Covid-19, they have mandated a 20% pay cut for all physicians for a 60-day period. IN ADDITION, they are cancelling the 401k match for the entire 2020 FY (July 2019 to July 2020), which they usually accrue throughout the year and only deposit at the end of their fiscal year. This is definitely bad faith business practice, but is it also illegal?
IN RESPONSE TO THE VERY RUDE RESPONSE ABOUT HOW I SHOULD JUST FEEL LUCKY TO STILL HAVE A JOB:
YOU ALL SHOULD FEEL LUCKY THAT THERE ARE STILL CRITICAL CARE PHYSICIANS LIKE MYSELF WILLING TO RISK THEIR OWN LIVES TO TAKE CARE OF THEIR PATIENTS NO MATTER WHAT. I AM LOYAL TO MY COMMUNITY, HOSPITAL, AND COWORKERS, OTHERWISE I COULD GET A MUCH HIGHER PAYING JOB ANYWHERE IN THE COUNTRY. Furthermore, the hospital systems are getting government bailout money. They may be hurting right now, but they are NOT struggling to stay afloat.
A: Before I answer this question please allow me to sit the stage: Your employer is struggling to stay on top of the waves during the worst economic downturn since the Great Depression--which started in October 1929 and lasted for most of the ensuing decade. IMO, you and all other employees should be appreciative of everything your (great) employer has done for you--and stop focusing on your own personal situation.
For your general information going forward, (until something legal changes) employers can do whatever they want to do about paying their employees--unless the employee has a written employment contract that say otherwise. Their Participation in the (GREAT) 401k retirement program is NOT required by law. Nor are matching contributions. So, here is the deal (IMO): All employees should accept what is happening and do whatever they can to HELP their employers--unless they want to start looking for a new job--in the worst recession (some say depression) that has ever occurred.
Paul E. Tennison agrees with this answer
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