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House backs new felony for theft of employees' retirement contributions
Summary
Lawmakers approved Senate Bill 244 to criminalize intentional diversion of employee retirement contributions by local employers or staff. Debate focused on felony classes and thresholds, defenses for staff acting under direction, and concerns about harsh penalties and recidivism.
The Alabama House passed Senate Bill 244 after extended floor debate over penalties and how the law would be enforced against local officials and payroll staff who divert employee retirement contributions instead of submitting them to the Retirement Systems of Alabama (RSA).
Supporters described the measure as closing a legal gap that left RSA with civil remedies but no criminal recourse when employers or their payroll staff refused to remit withheld retirement contributions. Sponsor Chairman Pettis told members the bill makes intentional diversion a criminal act; an affirmative defense is available for employees who acted in good faith following the direction or supervision of another.
Debate centered on penalty classes tied to monetary thresholds. Members questioned whether some cases—such as an employer diverting funds temporarily to meet payroll—should carry the same stigma and long prison sentences as aggravated theft. Representative Bracey asked whether penalties could differ when an official diverts money for municipal use versus embezzlement to a private account; sponsors said the bill contemplates intent and provides defenses, and penalties escalate with the amount involved under existing theft statutes.
Sponsors noted RSA has documented local employers who deferred members’ contributions and used the funds for other purposes, and they described the change as a proportionate response that creates criminal deterrence while preserving defenses for employees who followed orders. The final roll call recorded 103 yeas, 0 nays.
The House debate also included concerns about recidivism and rehabilitation; several members said they work on workforce reentry and worried about expanding felony offenses without clear thresholds. Several members asked for and received clarification about the dollar thresholds that determine felony class (class C/B/A) under theft statutes; sponsors said those thresholds align with existing classifications in state law and that RSA will pursue civil recovery before criminal prosecution.
Action: final passage recorded as a hundred and three ayes, no nays.
