If I owe money to an employer, can they deduct this from my 401K?

Question

I owe money to my employer for unaccrued vacation time. I took it prior to earning all of it and am wondering if when I get my distribution on my 401K balance, if they are allowed to take it out of that money.

Answer 1

Generally, when you have a situation like this, you just stop accruing vacation time until the shortage is made up.  Have you left this employer?  If so, I would think that they would take back what you owe from your last check.

Answer 2

They might try to take the 401k but legally they can't and you can/will get it back if you push.  They can't do that nor can they delay processing.   What they can do is have the check delivered to their address for you to come and pick it up.

Believe it or not, though, most employers aren't that vindictive.  They'll ask you to pay it and if you don't they write the money off and process the 401k and send you on your way hoping they never see you again.  

Answer 3

They can't touch your 401k itselt, but the can take the money that you would be putting in your 401k from a paycheck.

Here is a tip. They provide you a salary and job, don't mess it up. Call up HR and see how to settle this so you can put it behind you. You don't want to have an HR record when it comes review time. Smarten up!!!