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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.
Under Vermont law, the only deductions that may be made from employees’ wages are those permitted or required by law. Those would include taxes, Social Security, etc. and, with the employee’s written authorization or sufficient employer documentation, cost of goods or services (other than uniforms) provided by the employer to the employee for which repayment was intended. Without a statutory provision allowing it, employers may not deduct or withhold wages for such things as:
- an employee’s refusal or inability to provide or sign documents such as I-9 forms, tax withholding forms, etc.;
- an employee’s refusal to provide a notice of or reason for termination;
- an employee’s refusal to sign a document written by the employer, etc.;
- an employee’s inability or refusal to accept the wages in person (postal delivery is an acceptable means for the employer to comply with the timely payment of wage law);
- uniforms or the maintenance thereof;
- poor job performance;
- alleged shortages, bad checks or credit cards;
- destruction of or missing property.
Allegations of damages and improper payment of wages are separate issues and must be dealt with, if necessary, in separate court actions. Recovery of alleged damages may be possible through civil action, whereas illegal withholding of wages is in violation of Vermont’s criminal statutes and criminal prosecution is possible.
Employers may not deduct for medical exams required by the employer.
An employer may deduct for board, lodging, clothing, rent, or utilities furnished by the employer.
An employer can not deduct from an employee’s wages to finance any portion of the employer’s required contribution to the state unemployment compensation fund or for workers’ compensation insurance.
State
Contact
Vermont Department of Labor & Industry
Regulations
Vermont Statutes Title 21 Chapter 5 §301. Medical examination, expense
www.leg.state.vt.us/statutes/fullsection.cfm?title=21&Chapter=005&Section=00301
Vermont Statutes Title 21 Chapter 5 §384. Prohibition of employment
www.leg.state.vt.us/statutes/fullsection.cfm?title=21&Chapter=005&Section=00384
Vermont Statutes Title 21, Chapter 9 §699. Employees not to pay for insurance
www.leg.state.vt.us/statutes/fullsection.cfm?title=21&Chapter=009&Section=00699
Vermont Statutes Title 21, Chapter 17 §1323. Termination of coverage; agreement by employee to make contribution
www.leg.state.vt.us/statutes/fullsection.cfm?title=21&Chapter=017&Section=01323
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