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Employee owes their employer money

I have an employee that owes the company money. By law how much can I take out of his payroll check until it is paid back in full?


State and federal law limit the deductions employers can take from their employee’s when money is owed back to the company. Under the Fair Labor Standard Act (FLSA) you may make deductions to hourly and non-exempt employees as long as they do not reduce the employees pay below the required minimum wage. Also deductions may not affect the employee’s overtime pay. For exempt employees, you may violate their exempt status, a loan agreement or deduction should be on file in order to take deductions from exempt.

States are usually stricter than the federal government on deductions. Basically a court order or authorization in writing from the employee is needed in order to take deductions.

Please check with your states wage and hour laws before making any deductions.

This entry was posted on Sunday, February 10th, 2013 at 11:50 am and is filed under
Human Resources Management.
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