Employee Deductions Q&A

Employee Deductions | Blog Southwestern HR Consulting

3 years ago

Question: I can deduct payments from my employees’ paychecks for things that they owe me as an employer, right?

Answer: The Department of Labor reported on July 21, 2021, they found that the operator of three Denny’s locations violated minimum wage provisions (in addition to other provisions.) Specifically, the Division found that Rams Food, the operator of the three Denny’s, deducted the cost of uniforms from hourly and salaried employees causing minimum wage violations.

What does this mean? When deductions from an employee’s paycheck causes an employee to, in effect, make less than the minimum wage, the employer has violated minimum wage provisions.

Question: What if the employee never returns a uniform or the employee owes parking fees to me as their employer?

Answer: An employer can put together a process for the collection of fees. Doing so will avert having to make deductions which could lead to a violation of minimum wage. If the employer still decides to make deductions, they should have a written consent form from the employee allowing the deductions and the employer may need to spread the deductions around so that the minimum wage provision is not violated.

Southwestern HR Consulting can help you with this policy and others to keep you compliant including providing you with an associated form that will allow you to process deductions in an appropriate manner. Contact Us Today!