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Employment Law/vested profit sharing account


When fully vested in profit sharing account as have been with company 8 years can an employer refuse you access to your monies in that account when there in a medical need to gain access?  Only vehicle my son has is VERY unsafe mechanically and health wise, has mold, no A/C and has numerous mechanical safety issues.  Wife is 8 months pregnant, insulin dependant diabetic, daughter has a lot of medical issues such as asthma, juvenile rhumatoid arthritis, SEVERE allergies, has to be driven weekly 45+ miles to Johns Hopkins Hospital in Baltimore or to the arthritis doctor in Ellicott City.  Asked to take some monies out in order to buy a reliable used car as it is detrimental to daughters health not to mention you can not put a new born in a car with mold and no A/C.  Employer and comptroller flat out said "can not access account unless buying home or major emergency and buying a car is not an emergency".  They allowed a withdraw after gallbladder surgery almost caused eviction but that was after BEGGING them and now employer takes from weekly paycheck to pay back into account.  By the way this is an account that the owner and their family profit from.  Question is can the employer refuse access to monies that are rightfully the employees when that employee is requesting a withdraw due to life or death situation with a child or children.

It is not the employer that is refusing the money form the retirement account. The profit share account is a retirement account. There are certain rules and regulations that must be followed or the company will lose status for their retirement account and will no longer be able to offer it to anyone. They could also be fined or sued for not following regulations.

The IRS has very specific regulations for 401K and other profit share retirement plans.

The Plan also has a summary Plan Description. this SPD is registered with the IRS and must be followed. Within the SPD there are rules for the plan. It is very expensive to change plan rules so it is almost never done.

Whatever reasons are laid out in the plans SPD must be followed by the company and enforced.

Different plans often have different rules for loans from the plan. Most generally it is for Major Medical Expense, Purchasing a new Home, or Education Expense. It depends on the plan. You are not allowed to take out withdrawals until you are 59 1/2 other than loans. This should have been explained to the employee at the time of hire.  

Loans have to be repayed to the retirement account. So yes they are withheld from wages and paid back into the retirement account.

Ask for a copy of the profit sharing plan SPD document. The employees must be given a copy if they ask for one. It will have the rules of the plan contained within the document.

Has the reason for the car been explained to the HR department? It sounds like an emergency to me, however, I do not know what is contained in the documents of the plan.

I would put in a request for a "hardship withdrawal" based on medical conditions and the need for a vehicle to transport to medical appointments.

If you are refused you might try contacting

The EBSA division of the Department of Labor are the ones that regulate 401k plans. They might be able to help.


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Shirley McAllister, CPP, PHR


I can answer questions about payroll laws and payroll tax laws and Human Resource laws and agencies. I can answer federal payroll and human resource law questions and most states; I do not have a knowledge of the local taxes for cities and counties within the state. If and when I can I will try and send you the website where you can reference the answer and where you can obtain more information as well as a contact number if needed for that particular agency. Some agencies I have worked with are IRS, Department of Labor (federal and state), Revenue Canada (and provincial governments), Inland Revenue, OSHA (0ccupational Safety and Health Administration); Social Security Administration and National Child Support as well as other agencies in Payroll and Human Resources. Some Laws I am particularly familiar with are FLSA (Fair Labor Standards Act), ADA (Americans With Disabilities Act), FMLA (Family Medical Leave Act) COBRA (Consolidated Omnibus Reconciliation Act ) , QDRO's, QMCSO's, and other support orders and garnishments, USERRA (Uniformed Services Employment and Remployment Rights Act,PPA Act (Pension Protection Act of 2006, As well as most other employment type acts. I am also well versed in the Title V Civil Rights Act and the HIPAA (Health Insurance Portability and Accountability Act).


30 years in Payroll and Human Resources

SHRM (Society of Human Resources) APA (American Payroll Association) DOLEA (Department of Labor Employers Association) CPA (Canadian Payroll Association) NAPW (National Association of Professional Women) The Mentoring Network

PHR Certification in Human Resources CPP Certification in Payroll in U.S. Payroll Administrator and Payroll Supervisor certification in Canada

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