401k w/out authorization or notification

I am located in Georgia, my company is based in NY. I have been with my company for one year and without authorization or notification, they automatically signed me up for 401k and are deducting 3% from my paycheck. I found out about it, and cancelled it, but now they are telling me the only way to get the money back that they took is to leave the company. Is that legal? what should I do?

There are two possibilities.

One is that your employer has the type of 401k plan where an employee is automatically enrolled UNLESS you sign something saying that you do not wish to participate. The fact that this happened at one year's employment leads me to believe that this is the more likely scenario. If this is the case, then they are 100% correct that the only way you can get that money back is to leave the company. It is not only legal; it is Federal law.

The other possibility is that it legitimately was a clerical error, in which case most companies I know would reverse the deduction and return the money to you. This IS a violation of the law, but one that would probably pass muster with an audit (and make no mistake; they WILL be audited) if there is clear evidence of the error. However, since it technically IS a legal violation (once the money is in the fund, it's supposed to stay there!) I don't know of any way you can force them to do so.

Wouldn't they have to provide you this form to sign, if that is the only way to opt out of the program?

Are you 100% sure that you weren't give one way back when you were first hired? In my experience, many people don't look at or remember half of what they were given at that time.

I'm not saying that IS what happened, just that on the basis of your post it's the most likely scenario. But even if it was an adminstrative error, it's STILL a violation of the law for them to remove the money from the funds. It's one that would probably only rate them a slap on the wrist if audited, and it's what most companies I know would do, but they are within their legal right if they refuse. Even if it was their mistake to begin with.