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?

UPDATED: Sep 30, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

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


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption