Absolutely not. My fiance is going through a similar situation. He works for a federal contractor who has bounced his last 2 pay checks. He has not been paid before today for one month and just found out that the employer took away his health and welfare pay and claimed he is putting it into a 401k. First off, a 401k can not be started for you unless you are given the option to opt out, which he was not given. Secondly, those wages can not just be taken away regardless of where they are going. Basically, this idiot employer took my fiances own money without his permission to start him a 401k which he did not have the option to not have. All of these things are illegal. The employer does not have the money to pay his employees and is trying everything possible to pay them the least amount but he is too dumb to even know the laws or he is too ignorant to think other people actually know their rights as employees. the answer to your question is NO. Call the labor board right away, they will be happy to help. They responded to us in less than 15 minutes.

Also, I am very curious to know who your employer is and if the situation was resolved, what happened? Any information you might have could help us! Thanks

The company I work for is doing the same thing. I've been researching it for a while and also talked to the DOL. The only answer I can find is they can do what ever they want as long as they provide health and welfare benefits listed in the CFR and that includes somekind of pension plan. They can contribute to any plan or any combination of plans as long as it meets the requirements.

I wouldn't call it forcing you into a 401k plan, however, I believe the anwer to your concern is that yes, an employer can have a 401k plan set up whereas they put a certain percentage of funds into it for each of their employees automatically (e.g. like a pension plan or 401k match plan). And yes the funds they use to automatically set this type of plan up will come from your H&W funds. They can use these funds for any type of benefit (medical, life insurance, dental, 401k, etc.) for you. If you do not get any benefits, then that is when they legally have to pay cash out to you. Just as if all the benefits that you get exceeds that legal amount they have to use for your benefits, then they can take funds from your pay for it as well as if the benefits they provide to you does not add up to the legal amount they have to spend on benefits for you, then they have to pay cash for the balance to you. I hope that answers your question.

I am actually in the same situation. My employer is forcing 401k or the companies health care plan using health and welfare benefits. Although this is not a favorable situation, I have done my research and this is legal. I think if there are enough complaints they will have to put a percentage or limit on how much of the benefits are taking toward your company insurance or 401k or make it voluntary. The new healthcare system that is being introduced has a whole lot to do with this. I encourage all to look into Service Contract Act, and get knowledge of the companies policy, the awarding gov agency of the contract, talk with a lawyer and get familiar with the labor laws. If there is something to be done, now is the time to start.