Legal Deductions from an Employee’s Paycheck

Employers sometimes believe they can deduct anything an employee owes the company directly from their paycheck. That’s simply not always the case, and you may be searching for the top law firms in NYC to get you out of a legal battle if you make it a regular practice.

Each state has their own laws and regulations regarding legal deductions that can be taken out of an employee’s paycheck. Deducting certain expenses can be valuable to an employer, but there are several rules and standards you must follow in general to stay within the laws.

Deductions in Relation to Minimum Wage

The first thing any New York lawyer will tell an employer is to ensure the deductions don’t lower the employee’s earnings under the state’s minimum wage. There are very few exceptions to this rule, so it’s the first thing an employer needs to verify before deducting things like uniforms, equipment, lodging, food, broken items and others.

Uniforms, Tools and Equipment

Employers can legally deduct items like uniforms, tools and equipment from any employee’s paycheck. And in the case of uniforms, the cost of having them pressed, starched or cleaned can also be deducted. Again, an employer cannot deduct these if an employee is only making minimum wage, or if the deductions would bring their earnings below minimum wage.

Food and Lodging

Food and lodging are where employment lawyers in NYC have to do a little explaining. These are some of the very few exceptions to legal deductions as they relate to minimum wage. Food and lodging can be deducted from an employee’s paycheck, regardless of if it puts them below minimum wage. However, these deductions can only occur legally if they are benefitting the employee, and if it’s common in the industry.

Cash Register Shortages, Broken Items and Debt

Believe it or not, cash register shortages or broken items at the fault of an employee can be deducted from their paycheck, in many situations. The main thing a New York lawyer will remind an employer of is they have to ensure the employee is aware of the deductions being made. Some states require an employee’s consent in writing, essentially confirming they made the mistake.

Regarding a debt payback, an employer can deduct any loan made to an employee, and the minimum wage rule doesn’t apply. Examples of an employer loan could be an advance in pay or a one-time loan to pay for tools or equipment.

Gordon & Gordon is one of the top law firms in NYC because of their extensive experience in a variety of fields and practices. As an employer, you have many rights when it comes to deducting certain amounts from an employee’s paycheck. Be sure to reach out to us to learn more about legal deductions or to get answers to any specific questions you may have.