Can My Employer Deduct Money From My Paycheck? — In Plain Words

Uniforms, in the fact sheet’s words

Fact Sheet #16: “The FLSA does not require that employees wear uniforms. However, if the wearing of a uniform is required by some other law, the nature of a business, or by an employer, the cost and maintenance of the uniform is considered to be a business expense of the employer. If the employer requires the employee to bear the cost, it may not reduce the employee’s wage below the minimum wage of $7.25 per hour effective July 24, 2009. Nor may that cost cut into overtime compensation required by the Act.”

The fact sheet also states: “The employer may prorate deductions for the cost of the uniform over a period of paydays provided the prorated deductions do not reduce the employee’s wages below the required minimum wage or overtime compensation in any workweek.”

In plain words: spreading a deduction out over more paydays does not change the floor. In each workweek, the deduction still may not bring pay below the required minimum wage or cut into overtime compensation.

Other items for the employer’s benefit — breakage, shortages, and walkouts

Fact Sheet #16 has a section headed “Other Items.” It states: “Employers at times require employees to pay or reimburse the employer for other items. The cost of any items which are considered primarily for the benefit or convenience of the employer would have the same restrictions as apply to reimbursement for uniforms. In other words, no deduction may be made from an employee’s wages which would reduce the employee’s earnings below the required minimum wage or overtime compensation.”

The fact sheet then gives its own list of examples, in its own words: “Some examples of items which would be considered to be for the benefit or convenience of the employer are tools used in the employee’s work, damages to the employer’s property by the employee or any other individuals, financial losses due to clients/customers not paying bills, and theft of the employer’s property by the employee or other individuals.”

Read that list carefully for what it covers. In the fact sheet’s words, it includes tools used in the work, damage to the employer’s property, financial losses when clients or customers do not pay their bills, and theft of the employer’s property. This page does not add any item to that list.

Even when the loss is the employee’s own fault

Fact Sheet #16 states the next point plainly: “Employees may not be required to pay for any of the cost of such items if, by so doing, their wages would be reduced below the required minimum wage or overtime compensation. This is true even if an economic loss suffered by the employer is due to the employee’s negligence.”

In plain words, using only the fact sheet’s point: for the items the fact sheet names, the floor still applies even when the loss is due to the employee’s negligence.

Paying cash instead of taking a deduction is treated the same

Fact Sheet #16 states: “Employers may not avoid FLSA minimum wage and overtime requirements by having the employee reimburse the employer in cash for the cost of such items in lieu of deducting the cost from the employee’s wages.”

In plain words: for the items the fact sheet names, asking the worker to hand over cash instead of deducting the cost from wages does not get around the same minimum wage and overtime floor.

The problems the fact sheet itself lists

Fact Sheet #16 has a section headed “Typical Problems.” It lists these, in its own words:

• “(1) A minimum wage employee working as a cashier is illegally required to reimburse the employer for a cash drawer shortage.”
• “(2) An employer improperly requires tipped employees to pay for customers who walk out without paying their bills or for incorrectly totaled bills.”
• “(3) An employer furnishes elaborate uniforms to employees and makes them responsible for having the uniforms cleaned.”
• “(4) An employee driving the employer’s vehicle causes a wreck, and the employer holds the employee responsible for the repairs, thereby reducing the employee’s wages below the minimum wage.”
• “(5) A security guard is required to purchase a gun for the job, and the cost causes him/her to not earn the minimum wage.”
• “(6) The cost of an employer-required physical examination cuts into an employee’s minimum wage or overtime.”

Those six items are the fact sheet’s list, printed here as the fact sheet prints them. This page does not add a seventh problem to it.

Support from the Handy Reference Guide

The Department of Labor’s Handy Reference Guide to the Fair Labor Standards Act states the same floor in its “Basic Wage Standards” section: “Deductions made from wages for such items as cash or merchandise shortages, employer-required uniforms, and tools of the trade, are not legal to the extent that they reduce the wages of employees below the minimum rate required by the FLSA or reduce the amount of overtime pay due under the FLSA.”

That passage is support only. The rule on this page, and every list of items on this page, comes from Fact Sheet #16.

If you have a question about your own situation

This page cannot answer questions about any one person’s paycheck, and it does not try. Fact Sheet #16 prints where to get more information, in its own words: “For additional information, visit our Wage and Hour Division Website: http://www.dol.gov/agencies/whd and/or call our toll-free information and helpline, available 8 a.m. to 5 p.m. in your time zone, 1-866-4USWAGE (1-866-487-9243).”

This page is general information only. It is not legal advice.

Only the Department of Labor, a state labor agency, or a court can speak to a specific worker’s case. This page decides nothing.