Profit Sharing

[ziphash]

This doesn't quite fit under "job discrimination and harrassment," but I didn't know where else to post it.

I live in Ohio and work for a nationwide company out of Connecticut. My branch office is located in PA. Each employee within the company gets a "profit sharing" check every few months.

Our company deals with millions of dollars daily. One of the employees from my branch stole $20,000 from the company over a period of a few months. He was caught and is now spending time in prison. Because of this, the rest of the employees are being punished. No one from my branch is getting a profit sharing check now. We will not receive one until the $20,000 is paid back with our profit sharing checks.

Is it legal for the company to take our profit sharing checks to pay back an amount of money that was proved to be stolen by another employee?

 

[Beth3]

To be able to give you a definitive answer, I'd need to know whether this bonus plan is a "company policy" plan, or it's a formal benefit plan subject to ERISA regulations and has a Plan Document filed with the IRS and DOL.

I'd strongly guess that it's the former (since it's not a deferred comp plan) and that among other things, your employer has included in their policy that they can change, amend, or discontinue the plan at any time. I also expect the formula they use to determine the amouint of money that will be shared is tied directly to company profits - which is why they're calling it a profit sharing plan. (If they haven't tied it to gross or net revenue, they've done a bad job designing it.)

The answer to your question is most probably yes, the company can do this and that it's legal. A company has to have profits to share in order to share them. I'm guessing the thief was unable to make restitution so the company is out 20k which of course has a direct impact on you.

You may feel that the company is punishing you but they really can't just come up with 20K out of thin air. The guilty party here is the thief, not your employer.

 

[cbg]

Is this a formal profit-sharing plan that guarantees the provisions of payment? Or an informal plan that the employer has put into play as an added benefit to the employees?

 

[ziphash]

I'm not even 100% sure how the whole thing works. I do know that the amount of our check does depend on the company's profits. We do pay into a fund, but I believe that's a separate thing for retirement.

Isn't the money we deal with insured? I can't see how it wouldn't be since our job is to hold and distribute money to financial and other institutions.

Thanks for your help.

 

[Beth3]

The company may have some sort of insurance or bond on other institutions' assets that flow through your organization but there aren't any insurance products that insure profits.

Or are you asking if your employer had some sort of business insurance that provides coverage in the event of loss due to theft? That's possible but only your employer could answer that question.