Payroll Deductions
In most cases, there are only four conditions under which an employer may take deductions from an employee's paycheck. These include:
- The employer is required to do so by law for federal and state income taxes, Social Security and Medicare payments, workers compensation or a garnishment order from a court.
- The employee has authorized the deduction voluntarily and it is for the employee's benefit (e.g. medical deductions, 401(k) contributions or daycare costs).
- The employee has voluntarily given the company permission for other items, such as savings bonds through a local bank or money directed to another account.
- Deductions pursuant to a collective bargaining agreement, typically called "check-off."
Can my employer deduct money from my check for the purchase of uniforms or tools that are required for the job?
In many states the answer is no. Payroll deductions may not be made for an item that is required to do the job. Check with your local Department of Labor to see what the rules are in your jurisdiction.
Can my employer make deductions for meals and lodging?
Again, the answer varies by state. Most states allow this deduction, provided that the meals and/or lodging are for the private benefit of the employee.
CAUTION:Any deductions that an employer takes from an employee's check that is not authorized by law must be in writing.
If I break a work rule or negligently destroy company property, can the company deduct from my paycheck?
No. In the great majority of states, payroll deductions may not be made for these purposes. Though the company may have a right under certain circumstances to fine you, it cannot collect by deducting from your paycheck.
Can my employer require me to use direct deposit?
No. Direct deposit benefits both the employer and the employee. The employer does not have to write checks or have cash at the work site. It also makes tracking and recovery easier. For the employee, it avoids having to wait for a check to clear to receive payment. Under most direct deposit programs, the money is in the employee's account on payday, so that there is no need to go to the bank. Despite the convenience, if an employee wishes to receive a check, the employer must comply.