You have worked long and hard for your employer. And now after years of faithful service, you are about to vest in the pension or 401(k) plan. But shortly before your vesting, you are fired. You are told work performance is not up to par, but nothing about your performance has actually changed. You are told that they are downsizing, but you see they are advertising for your position in the paper, and that they are still hiring. The real reason your employer wants to get rid of you is to take away the pension or 401(k) benefits that you have earned with your dedicated service. It is illegal under the Employee Retirement Income Security Act (ERISA) in New York State and New York City for your employer to fire you just because you are about to vest in pension benefits. It may also be illegal to favor some employees with pension and 401(k) benefits, while depriving others, or to administer the pension or 401(k) plan in an improper manner.
These days, fewer employers are giving employee pension benefits. Your employer does not have to give you pension benefits. Nor does it have to give a minimum amount of benefits if it does have a plan. However, if there is a pension plan, you must have a fair opportunity to participate.
Once an employer decides to provide some or all of these benefits, it has to treat employees fairly under its plans. For example, if it has a pension plan, it must specify when you will begin to participate in the plan, and meet certain funding requirements. If you belong to a pension plan, you must be provided with plan summaries, and upon request a calculation of your benefits.
Pension plans are of two kinds. In a defined benefit plan, you get a certain amount per year after you reach retirement age. These are becoming rarer today, and are found mostly in the public sector. In a defined contribution plan, such as a 401(k,) a certain amount may be contributed annually to your account, which you can draw upon after you retire.
Your employer may treat you an independent contractor, even though you are in reality an employee. It has an incentive to misclassify you as independent contractor because it thinks it can avoid pension expenses.
Once having established a pension plan, your employer cannot discriminate against you by firing you to prevent you from participating in the plan. For example, you are just about to vest in a defined benefit plan or a defined contribution plan, and your employer fires you to deprive you of the pension benefits that you have worked hard for. That conduct would be in violation of ERISA. If you should be getting pension credits while you work, your employer cannot fire you because you have complained about your rights. That would be retaliation under ERISA.
Contact us online or call us at (212) 949-1001 so that we can review if your New York City employer has wrongfully deprived your of pension or 401(k) benefits.