QVC Suspends Employees Pending Investigation of 401(k) Hardship Withdrawals

By Staff Report

Aug. 6, 2009

Home shopping retailer QVC has suspended more than 200 employees at its Rocky Mount, North Carolina, distribution plant as it investigates whether the workers committed fraud in their 401(k) hardship withdrawal applications.

In an August 4 letter to suspended employees, Nick Brecker, vice president total rewards at QVC, said that his team had reviewed hardship withdrawal applications that came in from the center along with the company’s 401(k) administrator, Fidelity Investments, and determined that some applications “may not contain complete or valid supporting documentation, or we may have other questions about it.”

In the letter, Brecker advised those employees that they have two days to schedule an employment with a QVC Rocky Mount loss prevention specialist or an HR representative. “If you fail to schedule such appointment, we will accept your inaction as your decision to voluntarily resign your employment,” the letter states.

The letter goes on to explain that if the West Chester, Pennsylvania-based company determines that an employee committed fraud, they could be subject to “corrective action, up to and including possible termination of employment.”

Despite the investigation, the Rocky Mount plant is working at full capacity, said Tara Hunter, a QVC spokeswoman, in an e-mail.

“Every employee involved in the investigation will have an opportunity to meet with us to discuss the allegations, and all employees who are returned to work after the investigation will be made whole for any loss of scheduled hours,” Hunter said in the e-mail. “No determination has been made with respect to any employee at this time. Out of respect for the interests of all of our employees, we cannot provide any specific details of the investigation.”

Michael Shamrell, a Fidelity spokesman, referred calls to QVC.

Fraud in 401(k) hardship withdrawals is not uncommon, and companies would be wise to make sure they are really combing through these applications given the economic climate, says Rick Menson, an Atlanta-based partner at law firm McGuireWoods.

According to Watson Wyatt Worldwide, the percentage of companies that have seen 401(k) hardship withdrawals increase has jumped from 15 percent in October to 44 percent in April.

Companies need to audit 401(k) hardship withdrawals just as they do audits of health care plan beneficiaries, Menson said.

And if firms see a lot of these applications come from a specific region, that should prompt further investigation, he said.

“With the advent of electronic processing, people might think they can get things through,” he said. “Companies need to do audits.”

—Jessica Marquez

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.


What’s New at

blog workforce

Come see what we’re building in the world of predictive employee scheduling, superior labor insights and next-gen employee apps. We’re on a mission to automate workforce management for hourly employees and bring productivity, optimization and engagement to the frontline.

Book a call
See the software

Related Articles

workforce blog


Minimum Wage by State in 2023 – All You Need to Know

Summary Twenty-three states and D.C. raised their minimum wage rates in 2023, effective January 1.  Thr...

federal law, minimum wage, pay rates, state law, wage law compliance

workforce blog


New Labor Laws Taking Effect in 2023

The new year is fast approaching, and with its arrival comes a host of new labor laws that will impact ...

labor laws, minimum wage, wage and hour law

workforce blog


Wage and Hour Laws in 2022: What Employers Need to Know

Whether a mom-and-pop shop with a handful of employees or a large corporation staffing thousands, compl...

compliance, wage and hour law