Not all states have exactly the same exact rules.
HOWEVER, one rule remains true regaurdless:
Unauthorized payroll deductions are illegal and can produce a valid reason for an employee leaving their job. And, provide a solid basis upon which to collect unemployment benefits.
Post-separation deductions made to the employee’s final paycheck can also produce some other serious problems for an employer.
Unauthorized Deductions from Pay
Under MOST State rulings, employers may make deductions from an employee's pay only in the following circumstances:
where withholding is required by law (e.g., taxes, FICA, garnishments);
Where the deduction is voluntarily authorized by the employee, provided:
(1) the employee signs a written authorization,
(2) the deduction is for the employee's benefit, and
(3) the deduction is recorded in the employer's books (e.g., a salary advance); where the employee has signed an authorization for the deduction and the ultimate recipient of the money is not the employer (e.g., for a retirement plan or charitable contribution);
Where the deduction is authorized by union contract; or where the deduction is from a final paycheck for a loan to an employee, provided:
(1) the employee has voluntarily signed a loan agreement,
(2) the loan was paid in cash or by check to the employee, and
(3) the loan was for the employee's sole benefit.
A deduction from the final paycheck for repayment of a loan may not exceed the lesser of 25 percent of the employee's disposable earnings or the amount of disposable earnings in excess of $170 per week.
Deductions are prohibited to recoup the value of uniforms, broken or retained equipment, cash shortages, bad checks, a signing bonus or relocation payment that was not earned (for example, where the employee did not work the requisite period of time to earn the payment), or to fund a "bond" to insure the employer against such losses.
It is also important to note that in some States, the statute does not authorize deductions for overpayments made by the employer (e.g., overpayment of wages, use of vacation in excess of amount accrued, etc.).
The fact that a deduction is prohibited does not mean that the employer has no recourse. The employer may, for example, ask the employee to write a check for the amount at issue or, in some cases, reduce an at-will employee's pay on a prospective basis (with advance notice to the employee) until the overpayment is recovered. Alternatively, the employer may file a civil action to recover the debt.
Employees who have been subjected to unauthorized deductions have a private right of action, plus attorney fees.
Check your State Labor Board.
Re: Unauthorized Deductions from Pay
Member #: 15038
Registered: 1996-2001
Posted:
100
Name:
Steve Jones
Name:
Steve Jones
Company:
SLJones Communications
Occupation:
Broadband RF/HFC Design & Drafting
Location:
Holiday, FLA.
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