['Wage and Hour']
['Salary deductions']
06/11/2024
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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.
Massachusetts allows deductions for union dues, payments to financial institutions, to purchase stocks or bonds, to purchase shares of the employer, for charity, or for insurance premiums. Employees must provide a written request for such deductions to the employer.
No deduction, other than those required by law and those allowed for lodging and meals, can be made from the basic minimum wage.
Indirect deductions. An employer may not separately charge or bill an employee for fees or amounts not allowed as deductions.
The state regulations allow “deductions” for the value of meals and lodging within certain limits. Although the state refers to these items as deductions, they might be better described as a credit against the wages owed to employees. Essentially, if an employee receives something of value, the employer may count that lodging or meal as a part of wages paid. Employers cannot make deductions for (or count toward wages) items that benefit the company rather than the employee, such as uniforms.
Deductions for lodging. Deductions for lodging shall not be made unless the employer has given the employee prior written notice describing the lodging, setting forth the amount to be charged to the employee for the lodging, and providing notice that the employee’s acceptance of the lodging is voluntary, and the employee has provided voluntary written acceptance of the lodging and deductions. Deductions for lodging shall not exceed the following rates. (a) A sum not exceeding $35.00 per week for a room occupied by one person. (b) A sum not exceeding $30.00 per week for a room occupied by two persons. (c) A sum not exceeding $25.00 per week for a room occupied by three or more persons.
Deductions for meals. An employer may deduct from the basic minimum wage of an employee the cost of meals. If an employee is paid less than the basic minimum wage for hours worked, a deduction for meals is not permitted. A deduction for meals is not permitted unless the employee voluntarily accepts and actually receives the meal. Deductions for meals shall not be made by the employer unless the employer has given the employee prior written notice describing the meal plan, setting forth the amount to be charged to the employee for the meals, and providing notice that the employee’s acceptance of the meals is voluntary, and the employee has provided voluntary written acceptance of the meals and deductions. The maximum deduction for meals per day shall be as follows: Breakfast, $1.50, Lunch, $2.25; Dinner, $2.25. A deduction for one meal may be made from the wages of an employee working three hours or more. A deduction for two meals may be made from the wages of an employee whose work entirely covers two meal periods, or eight hours of work. A deduction for three meals may be made from the wages of an employee if lodging is provided, or if special permission is granted by the Director.
Deductions for uniforms. An employee or prospective employee who is required to purchase or rent a uniform shall be reimbursed for the actual purchase or rental cost of the uniform. Where uniforms require dry-cleaning, commercial laundering, or other special treatment, the employee must be reimbursed for the actual costs. Where uniforms are made of “wash and wear” materials that do not require special treatment, and are routinely washed and dried with other personal garments, the employer need not reimburse the employee for uniform maintenance costs. Employers can not require a deposit from an employee for a uniform or for any other purpose, except by permission of the Director.
Deductions and the calculation of overtime. Where deductions are made from an employee’s wages, the employee’s regular hourly rate used to calculate overtime compensation shall be the employee’s hourly rate before any deductions are made.
Note: The state Supreme Judicial Court has ruled that an employer can’t dock an employee’s pay as reimbursement for damages caused by an accident that was the employee’s fault, even with employee consent. This case stemmed from a waste disposal company’s practice of giving employees the option, if they caused an accident, of accepting discipline or agreeing to pay for the damage by means of wage deductions. The employees agreed to the deduction, and modest amounts were taken out of each check, which did not go below minimum wage. The court held that such an agreement amounted to a special contract, in violation of the Massachusetts Payment of Wages Law. Employers can make deductions, but only in certain circumstances, such as a wage advance, an independent finding of employee theft, or a judgment against the employee. Camara v. Attorney General (Jan. 25, 2011).
State
Contact
Massachusetts Department of Labor and Workforce Development
Regulations
M.G.L. chapter 154, Assignment of Wages
www.malegislature.gov/Laws/GeneralLaws/PartI/TitleXXI/Chapter154
454 C.M.R. 27.05: Wage Payments and Deductions From Wages
Federal
Contact
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
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