What are my rights rights regarding paycheck deductionsthat were not paid outon my benefits asthey should have been?

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What are my rights rights regarding paycheck deductionsthat were not paid outon my benefits asthey should have been?

My company closed down, told us not to come back to work in June, and is now claiming chapter11bankruptcy. It took money out of my paycheck from April – June for my medical insurance, my 401k and 2 loans against my 401k but did not apply them to where they should have gone. They are having a hearing in August and I do not know the total amount they owe me.

Asked on August 17, 2010 under Bankruptcy Law, Massachusetts

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Your rights are as follows: you have the right to get the coverage or other benefits you paid for. If you were not provided it, you can sue to seek the recovery of the money as well as any damages or other losses you suffered (e.g. medical bills you had to pay out of your pocket). However, if the company successfully files for bankruptcy, that could discharge, or eliminate, some of their obligations to you; also, if it doesn't have any assets or income, it may be almost impossible to recover the money, regardless of your rights.

You (possible in conjunction with any other affected employees; acting jointly could reduce legal costs) should consult with an attorney to explore your options. Depending on the nature of the business and its structure (e.g. was it a sole proprietorship, a partnership, an LLC, or a corporation?) you may be able to sue the owner(s) personally. It is worth discussing the matter with a lawyer.


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