Under the Fair Labor Standards Act (FLSA), employers of non-exempt employees are subject to numerous requirements regarding wages and hours worked. But there is a lot more to the FLSA, including what types of deductions such employers may make from an employee’s paycheck, even when it comes to the final paycheck.

For example, the employer of a non-exempt employee is allowed to deduct some items from the paycheck, such as work uniforms and tools, or even (hopefully well-documented) cash shortages and property damage. These types of deductions, which are those seen as primarily benefiting the employer, must comply with the FLSA, which means they must not take the employee’s paycheck below the minimum wage, including overtime worked. For example, if the employee made $8 per hour, and worked 50 hours their last week, his or her gross pay would normally come to $440. That means any such deductions cannot take the employee’s gross pay below $398.75, which is how much the employee would be owed if he or she worked 50 hours that week at the minimum wage of $7.25, including overtime.

There are other deductions, which the FLSA refers to as “voluntary wage assignments,” which are allowed even if they take a non-exempt employee below the minimum wage and overtime requirements. These types of deductions are very specific, and generally are seen as benefiting the employee. The most obvious such deduction is taxes, which everyone pays. But such deductions can also include such items as health and life insurance premiums, loan repayments, and recovery of previous advances made by the employer.

If an employee owes the employer money, however, the employer is allowed to collect it. There are many ways to do so without violating the FLSA’s minimum wage and overtime provisions. For example, the law doesn’t require an employer to pay a non-exempt employee for all of his or her earned and unused vacation and sick leave he or she is terminated. As long as the gross amount in the final paycheck exceeds the overtime and minimum wage requirements of the FLSA for that final pay period, the employer is probably within the FLSA’s legal requirement.

Always keep in mind that not every possible wage deduction has been included in the FLSA, so all employers should be very careful when withholding many possible deductions from any paycheck, but especially the final one. A general guideline is, if the employee benefits from what he or she is paying for, it will probably be allowed. If it’s for the employer’s benefit, it probably won’t, if the final gross amount falls below the FLSA’s minimum wage and overtime requirements.

References:

FLSA Rules for Paying Nonexempt Employee, Making Deductions from Pay

Allowable Deductions Under the FLSA

The post How Much Can An Employer Take From a Final Paycheck? appeared first on Saenz & Anderson | Attorneys at Law Serving Aventura, FL and Miami-Dade County.