Deductions from wages - Pennsylvania

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.

Under Pennsylvania law, deductions may be made that are authorized by law or regulation and are for the convenience of the employee, including contributions to employee benefit plans. Union dues may be deducted by agreement with the employee and must be paid within ten days from when they are due.

If an employee has borrowed money from a third party, he or she can give the employer written permission to deduct payments from earnings. If the employer has loaned funds to an employee, it can deduct the amount from earnings as long as the employee has given written authorization. An employee must give written authorization to make non-tax related deductions. It is not valid to sign a “blanket” authorization at the time of hire to cover any future deductions. Further, as a rule, deductions cannot reduce gross pay below minimum wage, and the deductions must be for the employee’s benefit.

Deductions from wages must be authorized in writing by the employee and may be made for group health and life insurance plans, company-operated thrift plans, stock option or stock purchase plans, payments to financial institutions, payroll deductions for U.S. bonds, charity, and for local area development activities.

An employer may not deduct for union dues unless authorized by the majority vote of all employees in the union and with written authorization by each employee affected.

State

Contact

Pennsylvania Department of Labor and Industry

Regulations

Pennsylvania Statutes Title 43 §260.3, Regular payday

Pennsylvania Code Chapter 9, §9.1, Authorized deductions; and §9.2, Restrictions.

Pennsylvania Statutes Title 43, §211.6, Unfair labor practices (union dues)

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