it’s your Friday good news

by Alison Green on January 21, 2022

It’s your Friday good news!

1.  “Your blog has truly been invaluable in shaping how I approached my recent job search as a recent college grad and leaving Old Job, which was toxic, even though I felt passionately about the mission.

There were a number of reasons to leave Old Job, but this one epitomizes it– they weren’t making my retirement contributions on time. In other words, retirement money was being taken out of my paycheck…and just sitting in Old Job’s coffers for MONTHS until I happened to one day check my retirement account and realize there was WAY less in there than there should have been.

When I initially raised this, my manager made a joke (“who knows where you’ll be in 40 years??”) and HR made an excuse (“it’s been a busy year.”) After I raised it again, they backfilled the contributions, but then forgot to deposit again the next month. Even after I escalated, letting them know that IRS guidelines mandate timely deposits, my manager eventually said to me that I wouldn’t be able to expect timely deposits. At some point, he even asked me not to follow up with HR until after a deadline they had together.

When I gave notice, Old Job offered to let me switch to a Dream Role in a different department. It was hard, but I still said no and accepted New Job. Nevertheless, the time before starting New Job was filled with regret. I loved Old Job’s mission and was kicking myself for not accepting Dream Role. I was starting to wonder if I should have just resigned myself to sending monthly reminders for HR to deposit my retirement contributions. Couldn’t I just do what other employees did, which was simply not use our retirement benefit because they didn’t trust HR?

When I left, HR gave me a $350 going-away present. My manager suspected it was out of guilt from not being able to make retirement deposits on time. Funny what an underresourced nonprofit can and can’t afford to do.

But now I’ve started New Job and I can’t believe how much I was starting to accept the unacceptable. There’s no way I should have been okay with irregular retirement deposits. And last week, I found out that Dream Role wouldn’t have been so Dreamy, because my would-be manager was fired after just a few months on the job. No regrets at all!

For any of you out there in a toxic workplace, leave before it starts to infect your soul. And definitely soak up all of Alison’s great advice on this site– I wouldn’t have been able to get out so quickly if not for her job search advice.

2.  “I work a series of jobs based on contracts that last anywhere from 1-5 years. Often while the job location will remain the same, the employer will change with each new contract. Last year, part way through one contract, I realized I was being significantly underpaid (both for my field and in comparison to my coworkers). That contract ended, however, while I was in the middle of discussing this with my then supervisor. By the time the new contract started and the new employer reached out, I had done my research and knew what salary range I was looking for. Initial conversations with the new employer were promising. When we discussed salary expectations, I followed Alison’s advice and talked about the salary range I was expecting instead of my previous salary. It sounded like we were on the same page but when the initial offer came through, though it was higher than my previous salary, it was still lower than what I was looking for. I wrote back explaining that, based on our previous conversations I was expecting an offer closer to $$ and asked if we could schedule a phone call to discuss. Not only did they respond right away, but they came back with an offer that was a little higher than what I was asking for! I’m now making 25% more than I did last year and finally feel like my salary adequately reflects my market value. I’d never tried to negotiate my salary before and I doubt I would have tried this time either if it wasn’t for this blog. Thank you!”

3.  “My government agency started promising me a promotion as a part of a reorganization in Summer 2019. Being the government, the plans moved slowly and then died a sudden death in early 2020 with the onset of the pandemic. We worked extremely hard throughout early covid as a healthcare related agency, being short staffed going in and a hiring freeze preventing us staffing up for over a year. I worked WAY TOO MUCH, but also had great opportunities to do really impactful work and got stellar feedback and was consistently being promised that the next available promotion was mine by multiple levels of leadership. When we started hiring again in Summer 2021, I was passed over for a promotion for an external candidate who was underqualified for the role (I’m biased in that assessment, obviously, but they also left in less than six months for a demotion, so…). My morale was already getting pretty low, but that was just rock bottom.

Now the good news! A role in the Secretary’s Office opened up (like cabinet secretary, not clerical staff), which was kind of my wildest dream next step. It’s a politically appointed position, so you can’t really apply, the best you can do is try to make sure the hiring manager knows you are interested. Well, I happen to know this hiring manager from some prior work we did together. I was so worried she would feel like I was taking advantage of that relationship, but scraped together all my courage and shot her a message saying as casually as possible, “no pressure, but putting it on your radar that I would be interested if you’re hiring”. She called me back, got my resume, “interviewed me”, and offered me the job all in the hour following my message! She was absolutely thrilled that I reached out and thrilled to hire me, which was a total boost to my waning confidence. My current job tried to counter offer me a promotion to stay, the same position they passed me over for a few months ago. But I’m heading for the secretary’s office in a few weeks and I’m just over the moon excited about the opportunity.”

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{ 65 comments }

{ 65 comments… read them below }

  1. Rachel*

    Companies can get in HUGE trouble not depositing their employees 401k payments in a timely manner. Penalties, Excise Tax, cancellation of the whole policy. This is a really big red flag for any company, and I would run away. This was one of the first things drilled into me when working as a payroll clerk – pay the 401k and the Federal Withholding/FICA on time OR ELSE!

    2. MissDisplaced*

      Yeah, it’s basically stealing! They’re deducting it from your salary and keeping it. But it’s not theirs to use.

      I work for a large company. During the pandemic, the company did receive permission to defer the matching (not the deduction just employer matching part) 401k contribution for 3 months. However, we were all notified this would be the case and when to expect it back-matched when they caught up. There are rules around this!

      1. Falling Diphthong*

        I could believe raw incompetence as an explanation.

        But I could believe a lot of less innocent explanations, too.

        1. D'Arcy*

          The IRS, per IRS Notice 2020-52 (https://www.irs.gov/pub/irs-drop/n-20-52.pdf).

          To quote the relevant section, “During the COVID-19 pandemic, an employer can suspend or reduce safe harbor matching or nonelective contributions, even if it isn’t operating at an economic loss or its safe harbor notice didn’t mention the possibility of suspending or trimming contributions. This relief is available to employers that adopt a plan amendment suspending or reducing contributions between March 13 and Aug. 31, 2020.”

        2. D'Arcy*

          The IRS granted companies permission to suspend or reduce matching contributions to retirement plans as a relief measure for the COVID-19 pandemic, per IRS Notice 2020-52.

    3. emmelemm*

      Yeah, my friend’s husband’s job started futzing about with their retirement contributions, and that is a very, VERY bad sign. Either they have *significant* money troubles, in which case the company may not exist for that much longer and you better write your resume, or they are being comically evil and underhanded (and stupid, because that is something that can get a company in legal trouble).

      (He’s since left, and the retirement contributions were restored, but the company did, in fact, go under, I believe.)

    4. LizWings*

      How about not paying health insurance claims? I worked for a small, toxic nonprofit which was self-insured, and at one point, co-workers suddenly started getting collections notices from their Dr’s and hospitals because our company just stopped paying the insurance claims, without telling anyone! We were still paying our premiums, but people had their doctors refusing to see them again until the outstanding bills were paid. I had a small surgery scheduled that I promptly canceled, so that I didn’t end up on the hook for the full amount. They eventually told people to just go ahead and pay out of pocket, and they would reimburse them. These were co-workers making just over minimum wage, in some cases, with chronic conditions.

    5. The_artist_formerly_known_as_Anon-2*

      Not just that – but what if the mutual funds, or wherever, that dough was going to go – had a wonderful escalation in value, and your boss was sitting on your money? IOW – let’s say your investment choice was the Schmoogle Doogle fund, and you had, say, $4000 pulled from your pay and it was supposed to go into Schmoogle.

      And then you learned that Schmoogle fund went up 25 percent in value and you missed out? Well, by golly they owe you $5000, not the $4000. The $4000 they never added but said they did, and the $1000 you lost in investment value.

      If you are in a company that has trouble paying you, or making your 401K deposits — that should be a STRONG AROMA. Also check to see if your health insurance bennies are being covered. and as Rachel said – FICA, although no payroll department will intentionally mess with the IRS.

      There was a case of a manufacturing firm in my home town – that was one of the “leader” contributor companies in the United Way. Employees began to question why they weren’t invited to the local group’s social events anymore – and then some employees found out that the money was being deducted from their pay — AND NOT TURNED OVER TO THE UNITED WAY! (regardless of how you feel about the UW, this had been a big cultural point of pride for that company’s employees).

      Then – a woman – wife of an employee – went into the hospital to deliver her baby. Within a few days, the hospital handed her a bill for a few grand – saying SHE HAD NO INSURANCE! Her husband checked with the company – “ummm, ummm, gee whiz, we dunno”…. He was in the unenviable position of having to haul his employer into court. The financial officer tried tap dancing and the judge just said “pay her damn bill. You’ve been collecting premium. Even if you have to reach into your own pocket – pay it in the next three days.”

      The executives and officers of the company all went to prison, eventually.

      1. Observer*

        although no payroll department will intentionally mess with the IRS.

        You think the guys who failed to pay the insurance premiums would be that afraid? I’d say nit necessarily. I mean, what did they think was going to happen the first time someone got hit with a big medical bill?!

        The OP was working for a company that apparently couldn’t be bothered to actually HAVE a payroll department (ie a person whose job is actually payroll or a payroll company.) And they were quite clearly deliberately delaying the deposits – that’s why the manager told the OP that they can’t even talk HR about till after some bogus deadline. And you know that it was not just the OP and their manager – the OP says that some people didn’t participate because HR was so sloppy.

        Oh, and the OP pointed out that the IRS mandates this stuff, and they STILL refused to even try to be timely. In other words they think that they CAN mess around with the IRS.

        1. Not Tom, Just Petty*

          Agree with you. OP’s boss response was, don’t bother HR with this stuff, like it’s about moving desks because your cube mate has a picture of a baseball player you hate. They are committing some version of wage theft, defrauding their staff and paying off OP to keep her mouth shut.
          OP, I know it didn’t seem like it to you, that you were seeing their actions as lousy administration not as the freaking crime it is (you said yourself the toxic environment warped your perspective), that you had and have no intention of reporting them to the DOL, but the events indicated to me that they know damn well that what they were doing, are doing and that will continue to do is shady af/straight up illegal, but they will through pennies at it to keep going. So damn right they will find money to avoid lawsuits and criminal charges.
          Well done on you getting out of there. Best of luck on this fresh start.

    6. Love to WFH*

      Yes, OP should seriously consider reporting them, out of kindness to the employees still stuck there.

      1. ForeverLurker*

        The Employee Benefit Security Administration at the Department of Labor does enforcement on these matters. They would love to hear about it.

    7. ArtK*

      I found out recently that a previous employer had not paid Federal withholding during the time I worked for them. They got hit with a $5M fine and the CEO is facing jail time.

  2. ShysterB*

    My lawyer heart skipped more than a few beats at the thought of RETIREMENT CONTRIBUTIONS NOT BEING DEPOSITED IN TIME!!! May the ERISA (or equivalent governmental) gods take revenge.

  3. Observer*

    Not making timely deposits on time?! And your boss told you that you’re not allowed to talk to HR until some arbitrary deadline?

    I’m going to suggest that you check all of your pay stubs and tax documents you got from them. Because not making retirement deposits timely tells me that they are NOT handling payroll correctly at all. And I would totally NOT be surprised if they have not been actually remitting and credit tax withholding either. You do NOT want to be on the hook for that.

    It’s good you are out of there – that’s an organization that’s a zombie. This is NOT about the org being “under-resourced.” Because it’s actually cheaper to get a basic payroll service – who WILL get the deposits made! – than having HR do payroll.

    By the way, that’s another huge red flag. Since when does HR actually do payroll?

    1. The_artist_formerly_known_as_Anon-2*

      Actually, there’s a technical account term for such activity.

      It’s called “juggling the books”.

      1. Observer*

        Yup. Which is NOT something the OP wants to be around. It’s wrong on every dimension you care to look at, it puts the OP at risk, and it indicates that the company is in big trouble.

    2. Lurker*

      A lot of times, smaller organizations lump payroll, HR, and bookkeeping together because they don’t have enough work or money for 3 separate employees.

      1. Observer*

        Those companies generally use a payroll company – assuming that they are actually honest, which these guys aren’t.

        1. Dana Whittaker*

          Some may, but I worked for a 6-person architectural/engineering firm (3 principals, 2 associates, and me), and I did HR, payroll, bookkeeping (A/R and A/P), invoicing, collections, benefits, office manager, facilities, cleaned, watered plants, and anything else that they dreamed up.

          We did have our outside accountant come in quarterly to do taxes, etc with me so there was a double check, but I simply followed the steps left by the previous office manager, and it was not rocket science. I had literally zero experience when I was hired – and told the owner that my first day. I apologized for the staffing firm wasting their time by sending someone with zero qualifications, and they still hired me and I was there for 5y2m.

    3. Confused*

      To answer your last question…at all the companies I’ve been at (six), HR has always done payroll…Since when has HR not done payroll???

      1. BenAdminGeek*

        At larger companies, payroll is a subset of HR, and may be partially outsourced. I think that’s where Observer is going.

      2. Lurker*

        Many years ago, at a larger non profit, the payroll person was part of their accounting department. Her primary function was payroll, and then helping accounts payable. The HR Director would work with her to review/approve the payroll but that was it.

  4. Jaxgma*

    Not only does the company have to make your retirement deposits on time, but if they’re late then the financial services company that is receiving the payments has to go back and calculate how much your earnings would have been if your money had been deposited on time, and your employer must make up the difference. What the company was doing by delaying the deposits is very illegal – it’s not even a gray area. It’s illegal. And what were they doing with your money in the mean time? Paying other bills? Embezzling?

    1. Observer*

      And what were they doing with your money in the mean time? Paying other bills? Embezzling?

      Good point. I was thinking about that, even though I failed to mention it in my comment.

      OP, I’m SOOO glad you are beginning to realize that their behavior is unacceptable. I just hope you realize JUST HOW unacceptable it is.

    2. Dust Bunny*

      OMG this: Dream Role wasn’t going to be what you’d hoped because I suspect that this organization is basically agonal and they were hoping to somehow use this as a cushion. Be very, very, glad you skipped that step and got out.

    3. TrackingCookieMonster*

      I am not a budget manager, but my first guess would be that keeping the money on the books instead of paying it out makes the financials look better than they actually are. I can see how having stronger-looking financials might be of benefit to a nonprofit.

      But I cannot fathom how badly that screwed over OP, since that’s decades of compound interest they’re losing out on now.

  5. Properlike*

    What’s the statute of limitations for not following IRS procedures? Because wouldn’t they also need to pay interest on those missed payments?

    If you haven’t already, please report this company to the IRS immediately.

    1. Observer*

      That’s a good idea.

      Also, if there are any government agencies who fund them or that regulate their services, report to those agencies as well.

    2. Emotional Support Care’n*

      That’s my question, too. I don’t trust the company to be accurate about pay, withholding, or anything, but I also am concerned about the potential loss of money those delays cost LW, and what losses the rest of the staff are currently accruing because I doubt the company has mended their ways, nor do I think LW was the only person having their deposits held back. This is a report immediately situation, for the financial well-being of everyone who’s worked there.

  6. WhiskeyTango*

    IRS yes, but this also runs afoul of ERISA. Consider making a report to the Division of Labor. Seriously.

  7. EL*

    LW1, I’m a payroll manager, and I knew instantly that this was a major issue. I’ve handled the process to fund 401k my last two positions, and it’s always one of the first things I do after I finish payroll. Sorry you had to constantly remind your HR department. I hope your old job made things right by seeking the advice of a qualified professional to determine the amount of earnings resulting from the late deposit.

  9. Nobody*

    I love all the updates, but LW3 made me want to cheer! I walked away from state government last year for the very same reason. Love that you both got a better job and was able to nicely tell them to stick their promotion. Too little, too late.

  10. BetsCounts*

    I used to do audits of employee benefit plans for a living and THE HAIR ROSE UP ON THE BACK OF MY NECK. I cannot emphasize what a huge deal late remittances to the 401k/403b plan is. The department of labor + the IRS would be INCREDIBLY interested in this. The company is REQUIRED to remit lost earnings (the amount of $$ you would have earned on your contribution if it had been deposited timely) and there are often additional penalties which are paid to plan participants- namely, YOU! I’m sorry you had to go through this but congratulations on New Job.

  11. Seriously?!*

    LW3: I was once an assistant manager at a bookstore and was passed over when the manager position opened up for an outside person. I knew it would be bad when I realized she couldn’t even count down a cash drawer correctly! Luckily I got a call for a teaching job I had applied to a year earlier and I was out. I tried to train the other assistant (who was new) the best I could before I left. After I left the new manager kept calling me to ask questions. I finally told her to call the other stores (with, you know, employees who actually worked for the company!) and quit taking her calls. A few months later I got a call from a friend. The manager was arrested, at the store, for stealing! She was messing with returns and pocketing the cash. I would have caught it if I’d still been there, but with 2 brand new assistants, she was able to get away with it for quite awhile.

  12. 2 Cents*

    LW 1: No dream position makes up for the compound interest you were losing out on by them screwing with your retirement.

    LW 3: They snoozed, they losed (lol). Congrats!

  13. Elenna*

    “My current job tried to counter offer me a promotion to stay, the same position they passed me over for a few months ago.”
    Oh, of course they did. *eyeroll* Glad you have a better job now!

  14. Momma Bear*

    #3 – so happy that you not only got a better offer but you got the reassurance that you ARE worth more than Old Company thought. Good luck at the new job!

  15. Full-Time Fabulous*

    #1 – You are so right about toxic workplaces. One day is too long to stay in one! I learned that the hard way when I overstayed in mine for years and I regret it but moving forward I have a much better mindset.

  16. Lizzo*

    LW #3 – this is *exactly* how “using your network” works for job hunting! :-D Congratulations! Wishing you lots of enjoyment in your new role, and heaps of confidence for whatever challenges it may bring–you can do it! We believe in you!

  17. e271828*

    OP 1, please check your Social Security deposits as actually received by the Social Security Administration (you can make an account at ssa.gov) against what has been deducted from your paycheck. If you have the ability in your state to check on your account there, please do that also. I believe it’s possible now to check your federal deposits with the IRS by setting up an online account with them, too.

    Do not discard any of your paystubs until you are certain that every penny owed to you has been paid—including the Social Security portion from your employer!

    2. The_artist_formerly_known_as_Anon-2*

      Also make sure that your W-2 matches what your last pay stub for 2021 did.

      What put the company that I discussed about (no UW payments, no health insurance payments) was that the company was, allegedly, doing funky stuff with FICA and other withholding taxes.

      The men and women involved in scamming their employees (and community) wound up as “Guests of the Fed.”
      They do serve Jell0 in there, I’m told.

  18. Observer*

    Picking up on yesterday’s discussion of Boards, OP perhaps you should send a letter or email to the Board describing what was going on with your retirement deposits.

  19. NeutralJanet*

    At first I read OP1 as saying that the employer offers a 401K match and those funds weren’t being deposited on time, but it was her own deductions not being deposited?! For those of your coworkers who didn’t contribute to their 401k, did they just get short paid by 5% unless they bothered HR about it??!!

  20. What401(k)?*

    Well I’m happy to read LW#1’s story, because my job has been taking our retirement contributions out and hasn’t contributed them in over a year. The only reason I’m still in it is because it’s my only tax write off. No idea if that’s a good reason or not…. Regardless, I wrote a letter to Allison 6 months ago asking how this should be handled and didn’t get my letter answered. You can bet your ass I’m following these comments.

    1. The_artist_formerly_known_as_Anon-2*

      US Department of Labor
      your local state Department of Labor
      Internal Revenue Service

      …. and if your company is publicly held, other governmental agencies. Security and Exchange Commission.

    3. Artemesia*

      And if they go bankrupt you may have trouble getting them deposited. They should have priority but once things go sideways who knows what actually happens.

    4. WellRed*

      If they are deducting those contributions from your check, they are stealing from you, not just the deduction, but any interest you might have earned over the time period. I’d also be concerned about whether SSN has been paid, etc.

  21. Purple Cat*

    Oh boy, LW1. Super-illegal. Your company should have also paid you the gains you lost out on for your missing deposits. You should absolutely contact the Department of Labor and file a complaint. If you know the name of the Third Party Administer that manages the plan you should contact them as well. (Source, husband is a TPA)

    1. Artemesia*

      There has been a huge stock market run up — correcting right now — but you would have had huge gains over the last year.

  22. cleo*

    #2 – congratulations! I love reading about successful negotiations and as a fellow contractor I find your story particularly inspiring.

  23. La Triviata*

    Any number of people THINK they can play fast and loose with the IRS. Just remember – the FBI has had “most wanted” people on their list for years and the Mounties don’t always get their man. Al Capone went to jail for tax evasion.

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