Need help.. Company sent letter to hubby about voluntary resignation, and now...

[hellokitty81668]

This is happening in NC. Hubby was injured on the job( he has a tear in a few of his lower disk) fell on the job in May. He was denied his WC and we now have a lawyer. Hubby is doing everything that he is supposed to. In July the company he worked for sent him a letter saying if he didn't report back to work on the 31st of July they would consider it his voluntary resignation and replace him, because they needed someone to work in his place. That day they canceled both his insurances( I have documentation) and I thought nothing of it. We recently inquired about his 401K and the opposing counsel said since he is still part of the company he can ask for a hardship withdrawal if hubby wants . They are claiming that they did not let him go at the end of July and he still has a place there.The law firm we have really has nothing to do with the 401K but is trying and said since they used the words considered voluntary resignation and I didn't receive any other notification that the workplace didn't let him go. I am prepared to contact the Dept. of Labor Friday( it will be a month since hubby and I contacted the company via certified letter about his 401K ) and let them try to straighten this out. Any ideas for me? Tia for the help.

 

[cbg]

I think that calling the workers comp commission would do more than the department of labor.

But there are a few things that are not clear in your post. He is entitled under the law to 12 weeks of medical leave. He is not entitled by law to any more than that, even if it is work related. On week 13, day 1, the employer may legally terminate his employment. They are free to consider it a voluntary resignation if they wish to. (We'll assume for the moment that FMLA applies - if FMLA does not apply, then he is only entitled to as much time as the company normally offers.) They are not required by law to send him any kind of termination letter, and they are still within the legal timeframe to send you COBRA information regarding the cancelled insurance.

That all being the case, what is it that you are trying to accomplish?

Regarding the 401k, I am not asking this to be nosy; there is a very specific reason I am asking that is related to a very specific law. What is it that you want to use the 401k hardship withdrawal monies for?

 

[hellokitty81668]

You are not being nosy. I think my question is that is he considered let go or not? If a letter was sent from the employer stating that they would consider my husband voluntarily resigning if he did not go back to work on the stated date in which they canceled his insurance and such. Now when I asked for the forms to release his 401k I was told that my husband was not let go. My husband is not receiving any income at all. WC denied his case and we are still awaiting the appeal, we have a mediation coming up in 6 weeks, but money is running out and I earn only a few $100 a week which doesn't cover much if at all. So we need the 401K to live on and pay bills and loans from friends. I don't think WC has much do do with this, because although he was injured on the job, he was denied the claim and we are appealing it. I just want to know how to figure out the legality of his status with the company. Can they cancel his insurance GHI and such saying that if he wishes to continue paying it that he can pay $800 out of his pocket, and then when we ask for his 401K 4 months down the line they say he is not let go. In my opinion this company is just trying to see my husband suffer financially and break him where he would need to work and thus loose the case. Hope this explains it better. HK

 

[cbg]

Okay, this is why I was asking. Since you say your attorney is not familiar with 401k's, I figured he might not have remembered this from law school.

IRS regulations are very, very, very strict about hardship withdrawals. No matter how desperate the situation, you CANNOT make a hardship withdrawal and use the money to live on and pay bills. If you apply on that basis, it will be disapproved. This is Federal law - there is no wiggle room and no exceptions.

If the situation reaches the point where you are faced with eviction from your home, you CAN use a hardship withdrawal for that. You will have to provide a copy of the eviction notice, and you will be allowed to withdraw exactly enough to stave off the eviction and not a penny more.

If the bills that you want to pay are medical bills that were not covered by insurance, you can use a hardship withdrawal for that as well. Once again, you will have to provide copies of the bills and the insurance statements, and unless you are facing thousands of dollars of uninsured expenses, I would recommend that you not do so.

The other reasons for which a hardship withdrawal is permitted do not apply in your situation. Additionally, not all 401k plans allow for hardship withdrawals in the first place. He might ask whether or not the 401k plan allows for loans, which are different from hardship withdrawals and can be used for anything you like. But again, not all plans allow for loans, and unlike a hardship withdrawal, loans have to be paid back.

Is your husband medically able to return to work yet? Again, I have something specific in mind.

 

[hellokitty81668]

My husband's job was heavy duty the DR. he saw said in his opinion he will not be able to work again at this type of job( sometimes lifting 200+ lbs). Like I said right now we are waiting for the mediation with the opposing council and then most likely hubby will have to go on disability. He is in pain daily and until this moves forward that is on the back burner. Our thinking was since this company considered him a non employer at the end of July that he was entitled to request all of his 401K( I all ready talked to the investment firm that has the money and they said once a person is no longer with a company , that person can request their money with a penalty) . Now they are saying he is still an employee, so that is down the drain unless I can somehow fight this, which is what I want. This company is very shady and my husband does not plan to ever go back, but he doesn't want to mess up any pending lawsuits with them.. Thanks again for the help.

 

[cbg]

It is true that if he is no longer an employee, you can request all of the money to be cashed out, and use the money for anything you want. You will have to pay taxes and a penalty.

Here's the problem, and don't think I don't understand the position it puts you in - I do. But the fact remains that your husband's employer is doing nothing illegal. If he wants to terminate his employment, that's legal as long as he got all the protected medical leave he was entitled to by law (and it sounds as if he did). If he does not want to terminate his employment, he is not required to. He CAN cancel his insurance as long as FMLA no longer applies, regardless of whether he is or is not terminated, as long as he is offered COBRA. BTW, I read your post wrong before - the one thing your employer has done wrong is not sending your husband COBRA information (if indeed he has not - was your husband offered the option of retaining the coverage at his own expense?). I thought at first he was still inside the window to legally send the notice, but the window has expired on second reading. But it is not your employer's problem whether your husband has income or not. Disability benefits are not required by law in your state.

I have one thought on how you may force the issue of whether he is or is not still employed. Submit the paperwork for a 401k distribution. NOT a hardship withdrawal and NOT a loan - the whole magilla. The employer will have to verify whether he is or is not an active employee. If he isn't, you'll get the money. If he is, it won't solve your financial problem, but at least you'll have an answer.