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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.
Montana law allows deductions from wages only under the following conditions:
(1) The employer is required to do so by law – for example, federal and state taxes, Social Security, or a garnishment order.
(2) The employee has authorized in writing and the deduction is for the employee’s benefit.
The employer cannot withhold wages or make an employee pay for damages, mistakes or shortages.
Employers must furnish itemized pay statements to each employee at the time of payment of wages showing all deductions for the pay period. If the employee has no deductions, the employer still needs to give a statement to the employee.
Reasonable deductions may be made for room, board, and other incidentals supplied by the employer whenever the deductions are a condition of employment or provided for by law.
Deductions are not allowed for:
- the cost of medical exams or records required by the employer.
- the employer’s required contributions to the unemployment insurance fund.
- any part of the worker’s compensation premium the employer is required to pay.
Subject to the following, when an employee is discharged by reason of an allegation of theft of property or funds connected to the employee’s work, the employer may withhold from the employee’s final paycheck an amount sufficient to cover the value of the theft if:
- the employee agrees in writing to the withholding; or
- the employer files a report of the theft with the local law enforcement agency within 7 business days of the separation from employment, subject to the following conditions:
- if no charges are filed in a court of competent jurisdiction against the employee for the alleged theft within 30 days of the filing of the report with a local law enforcement agency, wages are due and payable upon the expiration of the 30-day period.
- if charges are filed against the employee for theft, the court may order the withheld wages to be offset by the value of the theft. If the employee is found not guilty or if the employer withholds an amount in excess of the value of the theft, the court may order the employer to pay the employee the withheld amount plus interest.
State
Contact
Montana Department of Labor and Industry
Regulations
MontanaCode 39-3-204. Payment of wages generally
http://leg.mt.gov/bills/mca/39/3/39-3-204.htm
Montana Code 39-3-205.Payment of wages when employee separated from employment prior to payday -- exceptions.
http://leg.mt.gov/bills/mca/39/3/39-3-205.htm
MontanaCode 39-2-301. Unlawful for employer to require employee to pay cost of medical examination as condition of employment
http://leg.mt.gov/bills/mca/39/2/39-2-301.htm
MontanaCode 39-51-3103. Employer prohibited from making, requiring, or accepting deduction from wages or requiring or accepting waiver of rights under chapter -- penalty for violation
http://leg.mt.gov/bills/mca/39/51/39-51-3103.htm
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