Blanchard & Walker Weekly

Topic of the Week  Deductions From Pay

An employer has the right to make many types of deductions from an employee’s pay. These deductions include the cost of work-specific uniforms, tools, meals, lodging, and more. For anything that is for the employee’s benefit, the employer must first get the employee’s consent before providing the good or service and deducting the cost of the employee’s pay. However, there are limits on what employers can deduct from pay.

1. Is it legal for my employer to make a deduction from my pay?

You're probably already familiar with deductions for payroll taxes and Social Security, but there are a growing number of deductions which employers can legally withhold from your paycheck. However, only certain types of deductions can be legally withheld, and even then, the amount and/or percentage of the deduction is often limited by federal and state laws. Other types of withholding can be legally withheld only with your written permission and cannot be deducted if you have not authorized the deductions.

2. What types of deductions may an employer legally take out of my paycheck?

An employer may only make a deduction that is either:

 legally authorized; or

 voluntarily authorized by the employee and for the employee, not the employer's, benefit 

Some of the types of deductions which are authorized under federal and state law include: meals, housing and transportation, debts owed the employer, debts owed to third parties (through the process of garnishment); debts owed to the government (such as back taxes and federally-subsidized student loans), child support and alimony.

An employer is allowed to deduct certain items from an employee's paycheck if the employee has voluntarily authorized the deduction in writing. Examples of such deductible items are union dues, charitable contributions, or insurance premiums. These deductions are allowed even if the amount received by the employee after deduction falls below the minimum wage.

However, an employer generally cannot deduct any items considered to be for the benefit or convenience of the employer, if it would cause the employee's salary to be reduced below the minimum wage. Some examples of items which would be considered to be for the benefit or convenience of the employer are: 

 uniforms required by the employer that can only be worn on the job,

 tools used in the employee's work,

 compensation for damages to the employer's property by the employee or any other individuals,

 compensation for financial losses due to clients/customers not paying bills, and

 compensation for theft of the employer's property by the employee or other individuals.

Employees may not be required to pay for any of the cost of such items if, by so doing, their wages would be reduced below the required minimum wage or overtime compensation. This is true even if an economic loss suffered by the employer is due to the employee's negligence.

Thought of the Week

"So I say to the women out there in America, let’s keep this fight going! Put on your lipstick, square your shoulders, suit up, and let’s fight for a new American revolution where women are paid equal pay for equal work, and let’s end wage discrimination in this century once and for all!"

–Barbara Mikulsi

Weekly Comic by Jerry King

Weekly Comic by Jerry King

Blog of the Week

Top Five News Headlines

    List of the Week

    from Center For American Progress

    10 Essential Actions To Promote Equal Pay

    1. Issue a presidential memorandum or directive to relaunch the White House equal pay task force.
    2. Reinstate the federal government’s collection of pay data from employers.
    3. Tackle gender and racial wage gaps within the federal workforce.
    4. Launch a pay transparency initiative to improve employer accountability for pay practices and provide workers with better information.
    5. Undertake efforts to reduce pay secrecy.
    6. Make a budgetary commitment to significantly boost enforcement dollars.
    7. Conduct more compliance reviews of federal contractors to better ensure compliance with the law. 
    8. Increase the OFCCP’s number of “glass ceiling” reviews examining advancement opportunities for women and workers of color.
    9. Pursue economic security policies to help women remain in the workforce.
    10. Vocally support legislative measures to strengthen equal pay protections.
    Read more here.

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