Employers May Opt to Make Their Pension Plans SIMPLE

Q I work for a small TV production company. We do not have a retirement plan. I read recently that the minimum-wage bill included something called SIMPLE (Savings Incentive Match Plan for Employees).

What is that? And how much must my boss contribute?

--S.S., Costa Mesa

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A There is no requirement that an employer set up a retirement plan. However, there are rules that prohibit owners or executives of a company from simply setting up a plan for their own benefit.

If an employer chooses to use a pension or retirement plan, specific rules must be followed. SIMPLE is a retirement plan in which employees can contribute up to $6,000 annually and an employer provides a matching contribution of 2% to 3% of an employee’s income.

One advantage of retirement plans is that they allow employees to save money without currently paying taxes on it. Eventually, taxes may have to be paid. But it’s better for employees to defer taxes until after retirement, when they presumably would earn less and would fall into a lower tax bracket.

There’s also a general rule of thumb that if a person can postpone paying certain taxes for five years and earn interest on those amounts, the amount earned could offset the tax bite.

--Don D. Sessions

Employee rights attorney

Mission Viejo

A Case of Men Behaving Badly

Q I work in auto sales and practically run the finance department whenever the manager is away. I am the only woman in the department, and none of the men will do any tasks that they believe are “women’s work,” such as the computer work.

Even though I have taught the men how to use the computer, they still won’t use it on my days off, leaving most of the work for me to do when I return. They also make me do most of the telephone calling. They leave the simple, meaningless tasks to me while they sit around and wait for customers.

Even worse, I’m not paid as well as the men, and their attitude toward me is maddening. Do you have any suggestions?

--L.S., Hacienda Heights

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A You need to talk to your manager, or someone else in authority, about this situation immediately. It sounds as if you are doing work and taking on responsibilities that are beyond your job description, without any additional compensation or recognition.

Beyond this, your situation sounds intolerable, and you might want to consider looking for a better position that will recognize your skills and efforts, pay you fairly and treat you equitably.

The fact that you are paid less than the men also may be grounds for legal action, so you might want to consult with an attorney.

--Ron Riggio, director

Kravis Leadership Institute

Claremont McKenna College

Vacation Time Must Be Prorated

Q If I leave before my second year of employment is completed, is my employer obligated to prorate my vacation time?

--M.R., Santa Barbara

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A Yes. Under California law, vacation pay accrues as the employee works. Thus, if your employer provides two weeks of vacation per year and you only work for half a year, you are entitled to be paid for one week of vacation when you leave.

While employers may lawfully have a vacation policy stating that employees will not earn vacation pay during their first few months of employment, such a limitation would not apply during succeeding years of service.

--James J. McDonald Jr.

Attorney, Fisher & Phillips

Labor law instructor, UC Irvine

Employer Sets Bonus Terms

Q The company I work for has several distribution branches across the country. There are sales contests throughout the year in which the branches compete with one another. Sales and marketing reps at the winning branch split the prize money, which is disbursed two to three months after the winning branch is announced.

If my branch is declared the winner, am I entitled to my share of the prize money if I leave the company before it is disbursed? Does it matter whether I leave before or after the winner is announced?

--M.M., San Diego

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A It all depends upon what the terms of the written bonus program say, or, if there is nothing in writing, how the program has been administered in the past.

Theoretically, however, there is nothing wrong with an employer requiring an employee to be on the payroll on the date the bonus is disbursed to be entitled to receive a bonus. Therefore, it is possible that you may not be entitled to a share of the bonus if you leave before it is paid.

--Michael A. Hood

Employment law attorney

Paul, Hastings, Janofsky & Walker