ELAListserv Duduction from Compensation results …
State |Statute/Regulation &
Text of Response Email |Text of Statute/Regulation | |
|Arizona |A.R.S. 23-352 Withholding of wages |No employer may withhold or divert any portion of an employee’s wages unless one of the following applies: |
| | |1. The employer is required or empowered to do so by state or federal law. |
| |“Arizona law requires that the employer have prior written |2. The employer has prior written authorization from the employee. |
| |authorization from the employee for the withholding, unless the |3. There is a reasonable good faith dispute as to the amount of wages due, including the amount of any |
| |employer is required/empowered to withhold by state or federal law, |counterclaim or any claim of debt, reimbursement, recoupment or set-off asserted by the employer against the |
| |or there is a reasonable good faith dispute about the wage amount due|employee. |
| |to the employee.” | |
|California |Cal. [Lab.] Code §§ 224, 225 |224. The provisions of Sections 221, 222 and 223 shall in no way make it unlawful for an employer to |
| | |withhold or divert any portion of an employee's wages when the employer is required or empowered so to do by |
| |“It is generally permissible in California to [deduct the amount owed|state or federal law or when a deduction is expressly authorized in writing by the employee to cover |
| |on credit cards from an employee’s wages] if you have a signed |insurance premiums, hospital or medical dues, or other deductions not amounting to a |
| |authorization from the employee that gives the employer the right to |rebate or deduction from the standard wage arrived at by collective bargaining or pursuant to wage agreement |
| |deduct the wages. I’d make the acknowledgement as clear as possible,|or statute, or when a deduction to cover health and welfare or pension plan contributions is expressly |
| |stating that if the employee does not pay the bill with the money |authorized by a collective bargaining or wage agreement. |
| |already provided to the employee by the employer by [specify a | |
| |certain time period], and the employer has to pay the bill, then the |225. The violation of any provision of Sections 221, 222, 222.5, or 223 is a misdemeanor. |
| |employer can withhold the amount of the unpaid bill from the | |
| |employee’s next regular paycheck.” | |
| | | |
| |“You can go after the employee for reimbursement, but you cannot | |
| |deduct from wages, even if they agree to it.” | |
|Connecticut |Conn. Gen. Stat. § 31-71e Withholding of part of wages |No employer may withhold or divert any portion of an employee's wages unless (1) the employer is required or |
| | |empowered to do so by state or federal law, or (2) the employer has written authorization from the employee |
| |”This is a problem in Connecticut.” |for deductions on a form approved by the commissioner, or (3) the deductions are authorized by the employee, |
| | |in writing, for medical, surgical or hospital care or service, without financial benefit to the employer and |
| | |recorded in the employer's wage record book. |
|Delaware |Delaware Wage Payment Act |No employer may withhold or divert any portion of an employee's wages unless: |
| |Del. Code. Ann. tit. 19, § 1107 |(1) The employer is required or empowered to do so by state or federal law; or |
| | |(2) The deductions are for medical, surgical or hospital care or service, without financial benefit to the |
| |“…what is proposed would be acceptable in Delaware if there is a |employer, and are openly, clearly and in due course recorded in the employers' books; or |
| |written agreement that is consistent with this reg.” |(3) The employer has a signed authorization by the employee for deductions for a lawful purpose accruing to |
| | |the benefit of the employee, except that the Department, upon finding that it is acting in the public |
| | |interest, may, by regulation, prohibit such withholding or diverting for such purpose. If the Department |
| | |abuses its discretion and acts arbitrarily and without any reasonable ground, any aggrieved person may |
| | |institute a civil action in the Superior Court to have such regulation declared null and void. The |
| | |Department, in such action, shall not be liable for costs or fees of any nature. |
|Hawaii |Haw. Rev. Stat. § 388-6 Withholding of wages |No employer may deduct, retain, or otherwise require to be paid, any part or portion of any compensation |
| | |earned by any employee except where required by federal or state statute or by court process or when such |
| |“If your client has operations in Hawaii, it could experience |deductions or retentions are authorized in writing by the employee, provided that the following may not be so|
| |problems with their Hawaii employees. State law restricts |authorized, or required to be borne by the employee: |
| |deductions from employee checks. Deductions for items (other than | (1) Fines; … |
| |deductions required by law or court order) require the employee to | (3) Fines, penalties, or replacement costs for breakage; |
| |sign a written authorization. The authorization must specify the | (4) Losses due to acceptance by an employee of checks which are subsequently dishonored if employee is |
| |exact amount being deducted. Failure to comply can result in a civil|given discretion to accept or reject any check; |
| |action against the employer, with liquidated damages and attorneys | (5) Losses due to defective or faulty workmanship, lost or stolen property, damage to property, default|
| |fees.” |of customer credit, or nonpayment for goods or services received by customer if such losses are not |
| | |attributable to employee's wilfull or intentional disregard of employer's interest; … |
|Iowa |Iowa Wage Payment Collection Law |1. An employer shall not withhold or divert any portion of an employee's wages unless: |
| |Iowa Code § 91A.5 Deductions from Wages |a. The employer is required or permitted to do so by state or federal law or by order of a court of |
| | |competent jurisdiction; or |
| |“A written agreement is required under Iowa Code Chapter 91A. With |b. The employer has written authorization from the employee to so deduct for any lawful purpose accruing to |
| |an agreement in place, this would be acceptable in Iowa.” |the benefit of the employee. |
|Maryland |Division of Labor and Industry - |Work, whether satisfactory or not, must be awarded compensation. Wage deductions are extraordinary, and are |
| |The Maryland Guide to Wage Payment and Employment Standards - |prohibited unless: |
| |Wages and Compensation - Deductions from Wages |1. A court has ordered or allowed the employer to make the deduction. Examples include court ordered wage |
| |“In Maryland, employers may make deductions that are expressly |garnishments and orders to pay child support. |
| |authorized by the employee in a signed writing that includes the |2. The Commissioner of the Maryland Division of Labor and Industry has allowed the deduction to offset or |
| |deduction agreement only. Typically cannot take employee’s pay below|"pay for" something of value the employee has received. Examples include long distance telephone calls on the|
| |minimum wage.” |employer's business phone, personal loans, wage advances, etc. |
| | |3. Allowed by some law or regulation of the government. Examples include state and federal taxes. |
| | |4. The employee has given express written authorization to the employer to make the deduction. This should |
| | |take the form of a separate and distinct statement, signed by the employee, concerning only the deduction and|
| | |nothing more. Even with a proper authorization, however, employers must still pay at least the federal |
| | |minimum wage in the case of a deduction made to offset a loss to the employer due to the admitted or court |
| | |determined fault or negligence of an employee (for example, careless damage to the employer's truck). If the |
| | |deduction is made to offset something the employee received or retained from the employer which had monetary |
| | |value (for example, personal loan, use of long-distance telephone line, materials, etc.), the deduction may, |
| | |in that case, reduce the employee's wages below the minimum wage. Finally, an authorized deduction may be |
| | |invalid if it violates or is inconsistent with other federal or state laws or regulations. |
|Michigan |Payment of Wages and Fringe Benefits Act |(1) Except for those deductions required or expressly permitted by law or by a collective bargaining |
| |Mich. Comp. Laws § 408.477 Deductions from Wages |agreement, an employer shall not deduct from the wages of an employee, directly or indirectly, any amount |
| | |including an employee contribution to a separate segregated fund established by a corporation or labor |
| |“The Michigan Payment of Wages and Fringe Benefits Act requires the |organization under section 55 of the Michigan campaign finance act, Act No. 388 of the Public Acts of 1976, |
| |employee’s signed written authorization for each withholding from |being section 169.255 of the Michigan Compiled Laws, without the full, free, and written consent of the |
| |pay. I’m not sure an acknowledgment signed well before the actual |employee, obtained without intimidation or fear of discharge for refusal to permit the deduction. |
| |withholding (possibly a considerable period of time prior) will |(2) Except as provided in this subsection and subsection (4), a deduction for the benefit of the employer |
| |suffice.” |requires written consent from the employee for each wage payment subject to the deduction, and the cumulative|
| | |amount of the deductions shall not reduce the gross wages paid to a rate less than minimum rate as defined in|
| | |the minimum wage law of 1964, Act No. 154 of the Public Acts of 1964, being sections 408.381 to 408.398 of |
| | |the Michigan Compiled Laws. … |
|Maine |26 Me. Rev. Stat. Ann. tit. 26, § 629 Unfair Agreements |No person, firm or corporation shall require or permit any person as a condition of securing or retaining |
| | |employment to work without monetary compensation or when having an agreement, verbal, written or implied that|
| |“To comply with Maine law, the reimbursement for the charges on the |a part of such compensation should be returned to the person, firm or corporation for any reason other than |
| |card would need to be characterized as a loan or advance and the |for the payment of a loan, debt or advance made to the person, or for the payment of any merchandise |
| |employee would need to agree to the deductions in writing.” |purchased from the employer or for sick or accident benefits, or life or group insurance premiums, excluding |
| | |compensation insurance, which an employee has agreed to pay, or for rent, light or water expense of a |
| | |company-owned house or building. This section shall not apply to work performed in agriculture or in or about|
| | |a private home. |
| | | |
| | | For purposes of this subchapter, the word "debt" means a benefit to the employee. Debt does not include |
| | |items incurred by the employee in the course of the employee's work or dealing with the customers on his |
| | |employer's behalf, such as cash shortages, inventory shortages, dishonored checks, dishonored credit cards, |
| | |damages to the employer's property in any form or any merchandise purchased by a customer. |
|Minnesota |Minn. Stat. § 181.79 Wages Deductions for Faulty Workmanship, Loss, | Subdivision 1. Deduction requirements. No employer shall make any deduction, directly or indirectly, from |
| |Theft, or Damage |the wages due or earned by any employee, who is not an independent contractor, for lost or stolen property, |
| | |damage to property, or to recover any other claimed indebtedness running from employee to employer, unless |
| | |the employee, after the loss has occurred or the claimed indebtedness has arisen, voluntarily authorizes the |
| | |employer in writing to make the deduction or unless the employee is held liable in a court of competent |
| | |jurisdiction for the loss or indebtedness. Such authorization shall not be admissible as evidence in any |
| | |civil or criminal proceeding. Any authorization for a deduction shall set forth the amount to be deducted |
| | |from the employee's wages during each pay period. A deduction may not be in excess of the amount established|
| | |by law as subject to garnishment |
| | |or execution on wages. Any agreement entered into between an employer and an employee contrary to this |
| | |section shall be void. This section shall not apply to the following: |
| | |(a) in cases where a contrary provision in a collective bargaining agreement exists; |
| | |(b) any rules established by an employer for employees who are commissioned salespeople, where the rules are |
| | |used for purposes of discipline, by fine or otherwise, in cases where errors or omissions in performing their|
| | |duties exist; or |
| | |(c) in cases where an employee, prior to making a purchase or loan from the employer, voluntarily authorizes |
| | |in writing that the cost of the purchase or loan shall be deducted from the employee's wages, at regular |
| | |intervals or upon termination of employment. |
|New Hampshire |N.H. Rev. Stat. Ann. § 275:48 Withholding of Wages | I. No employer may withhold or divert any portion of an employee's wages unless: |
| | | (a) The employer is required or empowered to do so by state or federal law. |
| |“Under NH law, this would need to be characterized as a loan and | (b) The employer has a written authorization by the employee for deductions for a lawful purpose |
| |there would need to be a written agreement between the employer and |accruing to the benefit of the employee as provided in regulations issued by the commissioner or as provided |
| |employee as to when deductions would be made, the amounts to be |in subparagraph (d). |
| |deducted, and a specific agreement as to whether or not the employer | (c) The deductions are pursuant to any rules or regulations for medical, surgical, or hospital care or|
| |is allowed to deduct any amount from final wages.” |service, without financial benefit to the employer and openly, clearly, and in due course recorded in the |
| | |employer's books. |
| | | (d) Upon an employee's written request, an employer may deduct the following items from the employee's|
| | |wages, provided that the employer shall provide a written itemized accounting of such requested deductions to|
| | |the employee at least once per month:… |
| | | (3) Voluntary installment payments of legitimate loans made by the employer to the employee as|
| | |evidenced by a document that includes the following: |
| | | (A) The time the payments will begin and end. |
| | | (B) The amounts to be deducted. |
| | | (C) A specific agreement regarding whether the employer is allowed to deduct any amount |
| | |outstanding from final wages at the termination of employment. … |
|New Mexico |N.M. Stat. § 50-4-2(B) (1978) |B. Except as provided by rules of the department of finance and administration for payment of salaries |
| | |and wages to state employees, other than employees of institutions of higher education, promulgated pursuant |
| |“New Mexico allows employers and employees to agree upon deductions |to Section 10-7-2 NMSA 1978, an employer shall pay wages in full, less lawful deductions and less payroll |
| |form the employee’s paycheck.” |deductions authorized by the employer and employee. Wages shall be paid in lawful money of the United States|
| | |or in checks, payroll vouchers or drafts on banks, convertible into cash on demand at full face value or, |
| | |with the voluntary authorization of the employer, employee and financial institution, by deposit to the |
| | |account of the employee in any bank, savings and loan association, credit union or other financial |
| | |institution authorized by the United States or one of the several states to receive deposits in the United |
| | |States, without any reduction or deduction, except as may be specifically stated in a written contract of |
| | |hiring entered into at the time of hiring. An employer shall provide an employee with a written receipt that|
| | |identifies the employer and sets forth the employee's gross pay, the number of hours worked by the employee, |
| | |the total wages and benefits earned by the employee and an itemized listing of all deductions withheld from |
| | |the employee's gross pay. Nothing contained in Sections 50-4-1 through 50-4-12 NMSA 1978 shall in any way |
| | |limit or prohibit the payment of wages or compensation at more frequent intervals than those set forth in |
| | |this section. Where the labor or service to be rendered to an employer is recompensed on a task, piece or |
| | |commission basis or other method of calculating the amount of wages to be paid, other than a definite and |
| | |fixed amount in cash, the employer and the employee may agree in writing at the time of hiring that the wages|
| | |shall be paid on a monthly basis, on or before the tenth day of the succeeding calendar month. |
|New York |N.Y. [Lab.] Law § 193 Deductions from Wages |1. No employer shall make any deduction from the wages of an employee, except deductions which: |
| | |a. are made in accordance with the provisions of any law or any rule |
| |“The arrangement as you have described it will only be permissible, |or regulation issued by any governmental agency; or |
| |if the payment is deemed to be ‘for the benefit of the employee.’ If|b. are expressly authorized in writing by the employee and are for the |
| |the credit card is in the employee’s name and the timely payment will|benefit of the employee; provided that such authorization is kept on |
| |impact upon the employee’s credit I can see a possible argument that |file on the employer's premises. Such authorized deductions shall be |
| |the deduction is for the benefit of the employee. However, if it is |limited to payments for insurance premiums, pension or health and |
| |a corporate card the company is ultimately responsible for payment, I|welfare benefits, contributions to charitable organizations, payments |
| |think it is doubtful that the payment would benefit the employee.” |for United States bonds, payments for dues or assessments to a labor organization, and similar |
| | |payments for the benefit of the employee. |
| | |2. No employer shall make any charge against wages, or require an |
| | |employee to make any payment by separate transaction unless such charge or payment is permitted as a |
| | |deduction from wages under the provisions of subdivision one of this section. |
| | |3. Nothing in this section shall justify noncompliance with article |
| | |three-A of the personal property law relating to assignment of earnings, |
| | |nor with any other law applicable to deductions from wages. |
|South Carolina |S.C. Code Ann. § 41-10-40 Medium of payment; deposit of wages to | (A) Every employer in the State shall pay all wages due in lawful United States money or by negotiable |
| |employee's credit; prohibition against deductions in absence of |warrant or check bearing even date with the payday. |
| |written notice; time and place of payment. |(B) An employer may deposit all wages due to the employee's credit at a financial institution which is doing |
| |“This would be fine in South Carolina, so long as you have the |business in the State and is insured by an agency of the federal government. When an employee's wages are |
| |acknowledgement up front as to their agreement to reimburse |paid by deposit at a financial institution, he must be furnished a statement of earnings and withholdings. |
| |outstanding amounts as an advance on wages.” |Any wage deposit plan adopted by an employer shall entitle each employee to at least one withdrawal for each |
| | |deposit, free of any service charge. |
| | |(C) An employer shall not withhold or divert any portion of an employee's wages unless the employer is |
| | |required or permitted to do so by state or federal law or the employer has given written notification to the |
| | |employee of the amount and terms of the deductions as required by subsection (A) of Section 41-10-30. |
| | |(D) Every employer in the State shall pay all wages due at the time and place designated as required by |
| | |subsection (A) of Section 41-10-30. |
|Virginia |Va. Code Ann. § 40.1-29. Time and medium of payment; withholding |C. No employer shall withhold any part of the wages or salaries of any employee except for payroll, wage or |
| |wages; written statement of earnings; agreement for forfeiture of |withholding taxes or in accordance with law, without the written and signed authorization of the employee. An|
| |wages; proceedings to enforce compliance; penalties. |employer, upon request of his employee, shall furnish the latter a written statement of the gross wages |
| | |earned by the employee during any pay period and the amount and purpose of any deductions there from. |
| |“A signed authorization is sufficient in Virginia, but the deduction | |
| |should be conditioned upon the right to use the card, which I assume | |
| |is in the employer’s name, and not on continued employment.” | |
|West Virginia |W. Va. Code Ann § 21A-5-14 Deduction of payments from wages |An employer shall not deduct payments in whole or in part from the wages of an individual in his employ. |
| |prohibited. | |
| | | |
| |“In WV, an employer may not deduct any amount without first obtaining| |
| |a valid authorization from the employee. The WV Wage Payment and | |
| |Collection Act ahs some very specific requirements and provides for | |
| |penalties, such as liquidated damages and attorney fees for | |
| |violations.” | |
|US Department of |Letter from the Employment Standards Administration Wage and Hourly |“This is a response to your letter requesting an opinion regarding whether your client may deduct from the |
|Labor |Division, Dated March 10, 2006 |salaries of exempt employees or require them to reimburse the company for damage to or loss of company |
| | |equipment without jeopardizing the employees’ exempt status under the Fair Labor Standards Act (FLSA). … It |
| | |is our opinion that such deductions or reimbursements would violate the salary basis requirement of FLSA |
| | |section 13(a)(1).” |
| | | |
| | |“Either approach of [making periodic deductions from employee salaries or by requiring employees to make out |
| | |of pocket reimbursements from compensation already received] would result in employees not receiving their |
| | |predetermined salaries when due on a ‘guaranteed’ basis or ‘free and clear’ and would produce impermissible |
| | |reductions in compensation because of the quality of the work performed under the terms of the employer’s |
| | |policies, contrary to 29 C.F.R. § 541.602(a).” |
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