Illegal Deductions
Labor laws prohibit employers from deducting many costs and expenses from their workers’ pay. Only certain items are considered permissible payroll deductions, but companies often try to pass on their costs to their employees for such things as the cost of uniforms or the cleaning or maintenance of uniforms or tools or items from earned commissions.
Some of the kinds of illegal deductions include: (1) deductions for which no written authorization has been provided; (2) deductions from earned commissions such as deductions for advertising or selling costs or support costs; (3) deductions for performance deficiencies such as for failing quality checks or not meeting quotas; (4) deductions for missing /damaged /spoiled /lost employer property or tools; (5) deductions for expenses normally borne by the employer such as fees paid to third parties such as credit card companies or for background checks or use or rental of company equipment; (6) deductions for disciplinary measures such as for being late to work or too much break time or otherwise for failing to comply with company policies; or (7) deductions from tip pools.
On the other hand, in general, legal payroll deductions include: (1) deductions for taxes or wage garnishment; (2) deductions for voluntary charitable contributions, medical insurance, stock purchase, savings or pension plans; (3) deductions for repayment of loans or advances; and (4) deductions to repay shortages due to a proven theft by an employee.
If your employer is violating these payroll deduction pay laws, you (and other employees) may be entitled to a significant award of back pay. Please contact us for a free and confidential case evaluation or simply to learn more about the legality of your employer’s overtime policies.