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Deductions from final pay
  • State laws may limit the types of deductions a company can take from a terminated employee’s final pay.

Employers commonly ask about making deductions from final pay, which may be to recover training costs, relocation expenses, missing property, or other expenses. The Fair Labor Standards Act (FLSA) does not address this (except to generally prohibit deductions for damages from exempt employee salaries) and only requires payment of minimum wage for all hours worked. However, state laws may limit the types of deductions that can be taken.