Is it lawful for my employer to promise 401K match for 1 year and then send an email in the next year saying that they are not going to match?

I signed up for our 401k match program when they started it putting in 6 they said they would match it and my pay stubs for the last year have said that they were matching it. I got a email

yesterday saying that they were not going to pay out the 401K match for last year because they needed to save money. Is this legal for them to do?

Asked on April 1, 2016 under Employment Labor Law, Colorado

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

If you already did the work for which  they had said they would match the contribution, and at the time you did the work, the matching provision was in place, they have to pay you the match; they may not retroactively alter the rules or compensation for work already done, and doing so is a breach of contract--the agreement, whether written or unwritten, pursuant to which you did the work.
Going forward, they can announce that they are discontinuing the match as long as you don't have an in-effect written contract guarantying it to you--prospectively, they can alter your compensation or the terms under which you work. It's simply retroactively they cannot.


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