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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.
Kentucky law prohibits wage deductions unless:
- The employer is authorized to do so by local, state, or federal law
- A deduction is expressly authorized in writing by the employee to cover insurance premiums, hospital, or medical dues
- Other deductions not amounting to a rebate or deduction from the standard wage arrived at by collective bargaining or pursuant to wage agreement or statute
- Deductions for union dues where such deductions are authorized by joint wage agreements or collective bargaining contracts negotiated between employers and employees or their representatives.
Employers can not deduct the following from the wages of employees:
- Fines
- Cash shortages in a common money till, cash box or register used by two (2) or more persons
- Breakage
- Losses due to acceptance by an employee of checks which are subsequently dishonored if such employee is given discretion to accept or reject any check
- Losses due to defective or faulty workmanship, lost or stolen property, damage to property, default of customer credit or nonpayment for goods or services received by the customer if such losses are not attributable to employee's willful or intentional disregard of employer's interest
An employer can make deductions for cash shortages as long as the employer has written authorization from the employee to make the deduction, the deduction does not cause wages to fall below the applicable minimum wage, and the shortage is from a cash register or cash box that is only used by one employee.
An employer may not make a deduction from wages for lost or stolen property or damage to property.
State
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Regulations
Kentucky Revised Statutes §337.060
Federal
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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