Wage deductions are common. Employees do not actually receive 100% of their salary or the wages they earn through hourly employment. Employers withhold funds to cover state and federal tax obligations. They may withhold income because the worker is subject to a judgment or a child support order. Such deductions are lawful and possibly even legally necessary.
That being said, employers do not have the right to withhold funds from workers’ paychecks over employment disputes or other issues within the company. In some cases, those who have not received their wages in full may have grounds for a lawsuit because their employers violated their rights by inappropriately deducting money from their paychecks.
What types of deductions are not legal?
Deductions due to mistakes or performance issues
In some cases, employers may claim that they intend to assess a financial penalty for performance issues with a worker. Other times, they may insist on holding a worker directly responsible for damaging company property.
Perhaps the worker backs a piece of heavy machinery into the trailer of a semi-truck, causing thousands of dollars of damage. Maybe they forgot to lock the door of a retail establishment when leaving for the night, resulting in trespassers causing significant damage.
Perhaps a dishwasher broke a stack of plates. Employers generally cannot initiate wage deductions to hold employees accountable for their mistakes, damage to company property or performance issues.
Deductions for business expenses
Perhaps the worker needs to wear a uniform while on the job. The company has a responsibility to provide that uniform as opposed to charging the worker to acquire one. Maybe the job involves dangerous tasks or a risky work environment. Employers generally cannot pass the costs of training or mandatory safety gear to workers.
Additionally, they cannot force employees to share in the cost of operating expenses for the company by deducting funds from their paychecks. Workers who notice inappropriate deductions from their paychecks may need to communicate with their employers. In some cases, they may even need to take legal action to secure the pay that they have technically already earned.
Documenting what caused inappropriate wage deductions and discussing the matter with an employment law professional can help workers understand their rights. Illegal wage deductions are a common form of wage theft that may require prompt action to ensure that workers receive the pay they deserve.