Author Topic: Restaurant 401K  (Read 2100 times)

rockstache

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Restaurant 401K
« on: September 12, 2013, 11:16:42 AM »
I am writing this post to give advice to a relative.

This relative is a waitress working for a hotel restaurant. They offer a 401k plan, with a company match (not sure how much at the moment). She has enrolled in the plan (Fidelity), and I am helping her to select funds. As a waitress she makes most of her money in tips, not in her weekly paycheck. The company match will be determined based on her gross pay (which includes the tips), not just her hourly rate. What will thr procedure be if some weeks her paychecks are not enough to cover the percentage (of her total gross amount) that she puts in? Will she need to write a check to the company to cover it? Will they just put in less that week?

For the record, she asked HR and they told her that no one in the restaurant had ever signed up for the 401K before, so they have no idea how to handle it. (sigh.) The finance department is looking into it for her, but I was wondering if anyone else had ever heard of this, or run into a similar situation?

Kira

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Re: Restaurant 401K
« Reply #1 on: September 13, 2013, 08:58:29 PM »
No one has ever signed up before.. that is too funny! And that sounds like a pretty nice plan, especially for a restaurant - many don't bother to give their employees any kind of benefits at all, and they're matching her tips. Very nice.

I would think that the 401k would get whatever was in the check without her having to supply additional funds if there isn't enough. All the liquor in the world would not be enough to soothe the raving accountant who would have to balance the books if employees had to write the company a check to deposit into their 401k.

Daleth

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Re: Restaurant 401K
« Reply #2 on: September 14, 2013, 10:12:51 AM »
Also, I would imagine--could be wrong here--that the company match, if it's going to be based on her income, would be based on either her AVERAGE monthly income this year or her total annual income from the previous year. It's not going to fluctuate each week or each pay period, I'm thinking, because that would just be an accounting nightmare.

Kira

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Re: Restaurant 401K
« Reply #3 on: September 14, 2013, 11:32:41 AM »
Actually I wouldn't be surprised if it fluctuated, if it's a percentage or a tier-based system. Do you have any details on how the match works?