7 On Your Side: Employees say Va. company withheld their 401k deposits
STERLING, Va. (WJLA) – If you have money taken out of your paycheck for your 401k, you expect the money to go right into the market to start working for your retirement. But some local employees allege their company waited months to deposit their money, and it cost them.
They shed light on history, creating exhibits for museums, but employees say a Sterling company has been keeping them in the dark.
For decades, Clete Wood has overseen details for Explus, an exhibit company with about 75 employees. But even he didn’t notice one crucial point.
“That money was missing from your check,” he said. “It went somewhere, we just don’t know where.”
Every time Wood got paid, he saw deductions come out of his paycheck for his 401k. But records show that money did not make its way right into his retirement fund.
“I’m not that diligent about checking my everyday balance,” he said.
But after speaking with his coworkers, Wood believes Explus took thousands in 401k money from dozens of employees’ checks, and then held onto it, sometimes for months at a time before making a deposit.
“I understand economics are bad and I understand our business is a very niche sort of industry with the museum fabrication, but I also understand that accounting has to be held accountable,” Wood said.
7 On Your Side has tried to get answers, calling and emailing Explus repeatedly—even going to the company’s headquarters—but no one would talk to us.
Legal experts say companies with delayed deposits will have to explain this to the feds.
Virginia employment benefits attorney Howard Clemons of the Pillsbury Law Firm says there’s a hard line for when funds taken out of a paycheck have to be put in a 401k plan.
“There’s an actual hard deadline into the next month, 15 days into the next month,” Clemons said. “But that’s really not the rule. That’s sort of a hard deadline, the rule is much shorter.”
For smaller companies like Explus, Clemons says money should make its way into a 401k within seven days. But Wood says he and his coworkers saw delays as long as two months before a deposit; that could mean trouble with the feds.
Wood filed a complaint with the U.S. Department of Labor, which handles these issues. The agency will not confirm whether it is investigating, but Wood hopes action is taken.
“I want to get some results for everybody at the company who’s lost money on this,” he said.