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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.
Maryland law requires that work, whether satisfactory or not, must be awarded compensation. Wage deductions are extraordinary, and are prohibited unless:
An employer may include as part of an employee’s wages the costs of board, lodging, or other advantage afforded to the employee unless prohibited by a collective bargaining agreement.
An employer may deduct union dues from an employee’s wages.
An employer can not deduct from an employee’s wages any part of the premium for workers’ compensation insurance an employer is obligated to pay.
An employer may not require a deduction from an employee’s wages to cover the employer’s costs of unemployment compensation.
Contact
Maryland Department of Labor, Licensing and Regulation Division of Labor and Industry
Regulations
Maryland Statute § 3-503 (general)
Maryland Statute § 3-418 (board and lodging)
Maryland Statute § 4-401 (union dues)
Maryland Statute § 9-1101 (workers’ comp premiums)
Maryland Statute § 8-1303 (unemployment)
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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