I found an error in my favor on my paycheck. I reported it to my employer immediately with the full expectation that I would be responsible for paying the money back...here's the rub. My employer is expecting me to pay it back using after-tax dollars instead of the pre-tax dollars that were supposed to have been withheld from my paycheck.
Read on for the whole story...
My employer failed to withhold pre-tax funds to be allocated to my Flexible Spending Account in 2008. I did not catch the error because I thought the deductions were coming from a different line on my check stub that had the word "Med" in it (I'm a new employee). I was getting FSA statements from UHC (the FSA manager) with updates on how much money was left to be used before the end of the year, so I had no reason to believe there was a problem.
I discovered the error when a new deduction line appeared on my check stub in 2009. I went to the payroll department immediately but I was told it was an HR issue. I reported the error to HR that same day. Two days later, the HR rep forwards me an e-mail from the corporate benefits department saying that since the FSA was not set up on their end, it should be treated as though I was not eligible, so I should immediatelty refund any money I used from the FSA. Both the HR and the benefits reps acknowledged in the e-mail that I had elected to participate in the FSA program and submitted the appropriate paperwork to do so. The HR rep also mentioned in the e-mail that she thinks she “did not enter that line on the Employee DBA Instructions row” which is an admission that she made a mistake.
Here’s the problem…
From the company’s perspective, it’s no big deal…too bad, so sad…we made a mistake, so you don’t get to have that benefit for 2008…better luck next year. I think that is wrong. I fully expect to fund the FSA, but the company needs to figure out how to do that with pre-tax dollars. It was their mistake and now they want to penalize me for it by revoking a benefit that we had agreed to as part of my employment. Can they do this?
The way I see it, it's no different than reneging on a promise. If I hired a handyman to fix my deck and we agreed that I would pay him $500 upon completion of the work, he would expect to get the $500. If I told him after the work was done that I made a mistake in my calculations and that I would only be paying him $400 he would sue me.
I am not trying to get out of paying into the FSA, but I don’t think it’s right for them to expect me to fund it using after-tax dollars since that was not the agreement at the time it was set up. Any thoughts?What is the name of your state (only U.S. law)?
Read on for the whole story...
My employer failed to withhold pre-tax funds to be allocated to my Flexible Spending Account in 2008. I did not catch the error because I thought the deductions were coming from a different line on my check stub that had the word "Med" in it (I'm a new employee). I was getting FSA statements from UHC (the FSA manager) with updates on how much money was left to be used before the end of the year, so I had no reason to believe there was a problem.
I discovered the error when a new deduction line appeared on my check stub in 2009. I went to the payroll department immediately but I was told it was an HR issue. I reported the error to HR that same day. Two days later, the HR rep forwards me an e-mail from the corporate benefits department saying that since the FSA was not set up on their end, it should be treated as though I was not eligible, so I should immediatelty refund any money I used from the FSA. Both the HR and the benefits reps acknowledged in the e-mail that I had elected to participate in the FSA program and submitted the appropriate paperwork to do so. The HR rep also mentioned in the e-mail that she thinks she “did not enter that line on the Employee DBA Instructions row” which is an admission that she made a mistake.
Here’s the problem…
From the company’s perspective, it’s no big deal…too bad, so sad…we made a mistake, so you don’t get to have that benefit for 2008…better luck next year. I think that is wrong. I fully expect to fund the FSA, but the company needs to figure out how to do that with pre-tax dollars. It was their mistake and now they want to penalize me for it by revoking a benefit that we had agreed to as part of my employment. Can they do this?
The way I see it, it's no different than reneging on a promise. If I hired a handyman to fix my deck and we agreed that I would pay him $500 upon completion of the work, he would expect to get the $500. If I told him after the work was done that I made a mistake in my calculations and that I would only be paying him $400 he would sue me.
I am not trying to get out of paying into the FSA, but I don’t think it’s right for them to expect me to fund it using after-tax dollars since that was not the agreement at the time it was set up. Any thoughts?What is the name of your state (only U.S. law)?
