Double Jeopardy?

We have a policy that allows the employer to hold employees monetarily accountable for damage to company property. This could be in addition to the employee receiving an administrative action such as a reprimand or suspension for the same offense, property damage as a result of an action.

My questions: Does your company have a similar practice? If so, how does the employer determine the amount to hold against the employee? If it is damage in the thousands of dollars versus less than a hundred... is there discretion to adjust the amount, or is it the entire amount? How does an employer consistently carry out such a policy for all cases?

Anyway, I would like to hear your opinions, policies and practices related to this subject, and if you feel this is a form of double jeopardy. Thanks!

Comments

  • 8 Comments sorted by Votes Date Added
  • Unless you have a signed agreement from ee stating that the ee will reimburse for damage done to machinery due to mistreatment, how can the ER be reimbursed?

    It is considered part of doing business.

    Does Arizona allow for this type of reimbursement?
  • We have employees sign agreements on the tools or products they will be handling/using:

    Example:
    I agree to pay back $40.00 if I lose or break the Phone I am assigned.

    Reminder that both the employee and a representative from the company have to sign this. The amount deducted can not push the employee below minimum wage. (according to DOL)
  • Yup, you have to have a signed agreement. Per some Nebraska lawyers' advice, we have a section on the signature page of our handbook that they must initial saying we can deduct funds owed by the employee to our company. The lawyers that advised me on this said they have successfully represented companies (in Nebraska courts - maybe 8th circuit? can't remember) with a similar sign off sheet.

    That said, we've never used it (never really had a reason to use it, knock on wood). We did just implement an FSA, and I wonder if someone stiffed us on an expensive medical situation, we might use it under those circumstances. Of course, please remember that an employee must be paid at least minimum wage for hours worked, so you can only work with the amount between minimum and their wage.
  • When you say FSA are you talking about an employee filing a claim for more than they have in their account, but less than their annual election? Or, are you talking about your claims administrator paying more than they should have?

    If you are talking about the former, you cannot recoup that money. That is the employer's risk when they implement an FSA.

    If you are talking the latter, wouldn't that be up to the administrator? Their mistake, they must collect.

    Am I missing something in your comments?

    Nae
  • Nae, I have to admit I'm new to the administration side of the FSA so I could be mis-speaking. A hypothetical would be if an EE elects the maximum amount, has laser eye surgery and pulls it all out a month into the year, then quits a month later. The agent we're using alluded that we COULD recoup those funds, which is what I'm basing my answer on - I'm pretty sure you're saying no. Can you cite your source on this - is it a statute thing?

    I know the whole reason we set our max where we feel comfortable is to mitigate that very risk. I'm very interested in sorting this out - looking forward to your reply (or anyone else who jumps in)!
  • Nae is correct. I can't quote scripture and verse, but we have had this happen a couple of times. An ee will sign up for the maximum amount in flexible health care spending. Then have something done in the the first couple months of the year and then decide to quit and not return. I can send them a letter showing them how much they paid in and how much they withdrew from the account, but I CANNOT force them to repay us for this additional cost.
    Good luck....
  • I know there's a link in one of the forums from a relatively recent discussion...but I can't find it! You cannot force, and the employee cannot voluteer, to repay a negative balance in the FSA. That's the employer's risk of the plan.
  • Sorry. I am the worst person to ask when you want a legal reference that isn't in Publication B. x:-8 I know I read an article on it just this past year, but can't remember where. Perhaps someone else can be more forthcoming.

    We have been doing FSA for ourselves since 1998, and administered a few other plans (previous owner was a TPA) in 1994 and 1995. Recouping has been presented as taboo in my initial training and in every article I have ever read on the subject since. I believe we used to ask politely and had no recourse if they said no. Now you cannot even bring it up. (Apparently there was a court case on it.)

    First, your employee cannot pull out unless they are terminating employment. The IRS requires a full year committment. You can make certain changes if you have qualifying events, but they are to increase or decrease the amount based upon the change (ie increase when you add a dependent and decrease when you drop one.)

    You take the risk that the employee may elect the entire amount and then quit after 1 week into the year (I have actually had that happen). The employee takes the risk that they will not use all the amount they elected. (In 2005 I had one employee lose over $175 this way.)

    Hopefully, you will save enough in FICA taxes (and with some offset from employees who lose) that you will still save your company money. We have been ahead every year, even in the year we laid employees off right at the beginning of the year (several had taken out more than they had put in).

    Sorry I couldn't give you the regulation. Perhaps another forumite will. If not, I suggest you try irs.gov.

    Good luck!

    Nae
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