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There are many rules, both state and federal, regarding deductions from pay. Many states regulate deductions from pay much more strictly than the federal government. The regulation (state or federal) that is most advantageous to the employee takes precedence.

There are several types of deductions from pay. There are deductions made by employers, voluntary deductions requested by the employee and also involuntary deductions from pay, called garnishments.

Employers considering deducting from an employee’s pay must consider whether or not the employee’s wages will fall below the minimum wage, and if so, if this is allowed. There are instances called “reasonable cost” in which the employer may deduct from the employee’s wages, even if the wage then drops below the minimum wage. Some of these instances include: federal and state taxes, meals, fuel and merchandise, instructional costs, and deductions such as life and health insurance to name a few.

A deduction from pay that may not reduce wages below the minimum wage includes: uniforms, tools, personal use of a company car if it benefits the employer and cash shortages by those who handle money.

Find out More about deductions from pay
As the laws in different states on Human Resources get more complex, keeping current can spell the difference between success and disaster for your business. The HR.BLR.com editorial staff monitors a host of private and government sources to keep you up-to-date on all the important human resource developments.

The HR Library has more helpful resources on deductions from pay like these:

State Laws on Deductions from Pay

Deductions for Relocation Expenses

FLSA Regulations

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