Deductions from wages - Arizona

Summary of differences between federal and state regulations

Federal regulations restrict the types of deductions that can be made from an employee’s wages or salary. Deductions can be made in certain cases, but the legality often depends on the nature and purpose of the deductions, as well as the status of the employee as exempt or non-exempt.

An employer may only withhold an employee’s wages when the employer is required by state or federal law, the employer has the employee’s prior written authorization, or there is a reasonable good faith dispute as to the amount of wages due, including the amount of any counterclaim, reimbursement, recoupment or set-off asserted by the employer.

For deductions after October 1, 2011, a public or private employer may not deduct any payment from an employee's paycheck for political purposes unless the employee annually provides written or electronic authorization to the employer for the deduction. If a deduction is made for multiple purposes after October 1, 2011, the employer shall obtain a statement from each entity to which the deductions are paid that indicates the payment is for political purposes or a statement that indicates the maximum percentage of the payment that is used for political purposes. The employer shall not deduct any payment beyond that specified for nonpolitical purposes without the annual written or electronic permission of the employee. For the purposes of this provision, “political purposes” means supporting or opposing any candidate for public office, political party, referendum, initiative, political issue advocacy, political action committee or other similar group.

This restriction does not apply to any of the following:

1. A single deduction for nonpolitical purposes.
2. Deductions for savings or charitable contributions.
3. Deductions for employee health care, retiree or welfare benefits.
4. Deductions for state, local or federal taxes.
5. Deductions for contributions to a separate segregated fund pursuant to 2 United States Code section 441b(b) or section 16-920, subsection A, paragraph 3.
6. Any deduction otherwise required by law.

State

Contact

Industrial Commission of Arizona

Regulations

Ariz. Rev. Stat §23-352. Withholding of wages

No employer may withhold or divert any portion of an employee's wages unless one of the following applies:

1. The employer is required or empowered to do so by state or federal law.
2. The employer has prior written authorization from the employee. However, an employer shall not withhold wages under a written authorization from the employee past the date specified by the employee in a written revocation of the authorization, unless the withholding is to resolve a debt or obligation to the employer or a court orders otherwise.
3. There is a reasonable good faith dispute as to the amount of wages due, including the amount of any counterclaim or any claim of debt, reimbursement, recoupment or set-off asserted by the employer against the employee.

Ariz. Rev. Stat §23-361.02. Paycheck deductions; authorization; civil penalty; definition

Federal

Contact

Wage and Hour Division

Regulations

For non-exempt employees:

29 CFR Part 531, Wage Payments under The Fair Labor Standards Act of 1938

For exempt employees:

29 CFR Part 541, Subpart G, Salary Requirements