Wage deductions: What can my employer take out of my paycheck?
Wage Deductions Required by Law
The law requires that employers make certain wage deductions from your paycheck. These include deductions for:
- Federal taxes
- State taxes
- Social Security taxes
In addition, courts sometimes order an employer to make wage deductions. This is known as wage garnishment. Wage garnishment, when ordered by a court, is a wage deduction required by law.
Other wage deductions are allowed only if:
- the employee authorizes them in writing,
- they benefit the employee in some way, AND
- they do not reduce the employee’s gross pay below minimum wage.
Wage deductions allowed but not required by law include (but are not limited to) the following:
- Contributions to and recovery of overpayments under employee welfare and pension plans
- Payment into company-operated thrift plans
- Payment into personal savings accounts (e.g., into a Credit Union or for Christmas or vacation savings)
- Payments to charitable organizations
- Payments to pay back a bona fide loan from your employer
- Payments to your employer for purchases of goods, wares, merchandise, services, facilitates, rent, or similar items
Wage Deductions: When the Law Isn’t So Clear
Sometimes, even after reviewing the law, it can be unclear whether or not a particular wage deduction is legal. Consider the following examples:
- Suppose you are a cashier. Your drawer comes up short at the end of shift. Your employer deducts the difference from your paycheck.
- Suppose you somehow damage or lose property belonging to your employer. He or she deducts the cost of the damages or loss from your paycheck.
- Suppose your employment requires you to wear a particular uniform and use certain tools. Your employer deducts the cost of that uniform and those tools from your paycheck.
The law does not specifically speak to the above examples of wage deduction. The Wage Payment and Collection Law, does, however, state: “[Wages] shall be paid in lawful money of the United States or check, except that deductions provided by law, or as authorized by regulation of the Department of Labor and Industry for the convenience of the [employee], may be made…” (emphasis added)
Remember, wage deductions must, in some way, benefit the employee. The wage deductions that occurred in the three examples above do not provide an obvious benefit to the employee. In fact, they actually benefit the employer. For this reason, wage deductions in these kinds of scenarios are probably not permissible. If you have questions about wage deduction, it is best to speak with an employment lawyer.
If an employer is making illegal wage deductions, he or she is not paying you all the wages you earned. If you believe your employer is making unlawful wage deductions from your paycheck, don’t hesitate to contact a KM&A attorney for a free and immediate consultation. We represent clients across Pennsylvania. Call an employment lawyer in Pittsburgh at 412-626-5626 or in Philadelphia at 610-616-5686. We can also be reached by email at email@example.com.