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Deducting Shipping Costs from Employee Pay

We had to fire an employee who was going back to her home state. She was told she could collect her things at the shop the next morning before hopping on a plane. She chose to leave without picking up her property so we shipped it to her at a cost of $80. Can we deduct this from her final pay? Thank you.

The federal Fair Labor Standards Act (FLSA) establishes regulations for employee compensation. Under the FLSA, non-exempt employees must receive at least the applicable minimum wage for all hours worked and overtime pay for hours worked over 40 in a workweek while exempt employees must receive their full salary for any workweek during which work is performed with limited exceptions.

An employee’s final paycheck should include all compensation due for the time worked. Deductions from an employee’s last paycheck should be limited to those required by law (i.e. taxes, garnishments) and those authorized by the employee in advance (i.e. insurance premiums, union dues, charitable contributions). Additional deductions especially ones unauthorized by the employee should be avoided.

Further, even though the employee chose not to pick up her belongings, you made the decision to ship them to her. Thus, it’s advisable to absorb the cost as a business expense. It’s not worth the risk of the employee filing a wage claim.

Lastly, many states have their own regulations regarding wage deductions and abandoned property. It’s best to be knowledgeable in any such applicable laws for future reference.


This entry was posted on Monday, May 1st, 2017 at 7:17 pm and is filed under
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