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What employers can and cannot deduct from paychecks

Employees generally have protected rights to receive the full amount of money they earned in their paychecks. However, some employers may attempt to deduct certain expenses or fees from employees' paychecks. It is illegal to do so unless the deductions fall within strictly defined legal parameters. Broadly speaking according to California wage and hour law, deductions are only allowed when state or federal law requires it, when the employee authorizes the employer in writing to cover insurance, welfare or pension costs, or when a collective bargaining agreement authorizes the employer to deduct for these costs.

There are several common illegal wage deductions that employers may attempt to make. Legal action may be warranted if wages are being deducted by an employer for such things as gratuities, photographs, bond payments, uniforms, medical or physical examinations, or other business expenses, including equipment broken on the job. Employees are entitled to all gratuities received on the job, and employers must pay for all business expenses related to employee management and equipment maintenance/repair.

Additionally, there are a few loophole considerations of which employees should be aware. First off, it is legal for employers to deduct from a paycheck if an employee comes in late, but only to the extent commensurate with the hours that weren't worked. The minimum that may be deducted is 30 minutes, so if an employee arrives 5 minutes late, he or she may have 30 minutes worth of pay deducted from the day's earnings.

An employment law attorney may be able to help bring legal action against employers for illegally withholding or deducting wages from a paycheck. The process involves filing with the Division of Labor Standards Enforcement, then presenting a case before a deputy labor commissioner.

Source: State of California, "Deductions", November 18, 2014

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