Larry, thanks for all the information. Could you answer this for me? I have an employee that broke a piece of equipment that cost over $300. I want to take $50 a pay period out of her payroll check. Before I start recovering my money I want to make sure that I am not getting into an trouble. Your thoughts?
Inus
Inus, making unauthorized deductions from an employee's pay can be a serious mistake. Employers can legally deduct from an employee's pay amounts that are only authorized or required by law (such as tax withholding), by court order (such as garnishments), and amounts authorized by the employee (such as the employee's share of health insurance).
What are unauthorized deductions? State laws vary and it can be tricky. In addition, federal wage and hour law requires payment of agreed upon and earned wages (with the allowed deductions listed above.)
I would recommend that you first talk with your attorney to see if this is permitted by your state law or your state department of labor. Even with the employee's permission, this could be a problem.
Larry Kopsa CPA
