Deductions from Wages - Washington

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 Washington law, certain deductions are allowed when worker is still employed, or when the worker has voluntarily quit or been discharged. These deductions may reduce the employee’s wage below the minimum wage in effect at the time of the deductions.

• Required state and federal taxes, including the worker’s share of workers’ compensation premiums.
• When a worker agrees in advance to a deduction that is to his/her benefit. Examples: personal loans, personal purchases of business’s food, equipment, services, or purchase of items the business sells to the public, for the amount to bail worker out of jail, for worker health and dental insurance payments or co-payments, etc. The deduction may not cause the business to benefit financially. During employment, the worker must agree to the deduction in writing. Deductions from a final paycheck require an oral or written agreement.
• Medical, surgical, or hospital care or service when the business pays for the worker’s medical, surgical, or hospital care or service and the worker agrees to deductions from wages to repay those costs to the business. This is different than deductions a worker may have agreed to for insurance coverage for health, dental, hospitalization, etc.
• Court-ordered garnishments, including those for child support.

The following deductions are allowed only from a worker’s final paycheck. These may be applied only to incidents in the final pay period and may not be saved up from previous pay periods to be deducted from final check. They may not reduce the worker’s final check below the applicable minimum wage. The business has the burden of proving that workers were informed of company policies regarding these deductions. The Department of Labor & Industries recommends that the business put all such policies in writing and obtain written acknowledgment that the worker has read and understood these policies.

• Cash shortage in the till, only if the business has established policies regarding cash acceptance, and if the worker has counted money in the till before and after shift and has sole access to the till during his/her shift.
• Breakage, loss or damage of equipment, if it can be shown to have been caused by the worker’s dishonest or willful act.
• “Bad checks” (NSF) or credit card purchases accepted by the worker if the business has established check and credit card acceptance policies before the event.
• Worker theft, only if the business can show that the worker’s act was dishonest or willful, and if the business filed a police report.
• Other agreements made orally or in writing between the worker and business at the time of termination. If these agreements are for the worker’s personal benefit, the business may reduce the employee’s final check below the applicable minimum wage. If the agreements are for the business’s benefit, the final check must be paid at the applicable minimum wage for all hours worked in the final pay period.

A deduction from wages is never allowed for unemployment compensation. The entire unemployment compensation premium must be paid by the business.

Uniforms

The business must pay the full cost of a uniform. The business may not take money from wages or require a deposit from the worker for such a uniform. It is considered a uniform if the clothing the business requires workers to wear:

• Clearly identifies the worker with that specific business.
• Is specially marked with the business’ logo.
• Has an ethnic or historical theme. Examples: A store requires Hawaiian shirts for a theme for a special sale; A Mexican restaurant requires clothing that represents Mexico.
• Is formal clothing such as a tuxedo, including the tuxedo-type shirt, tie, cummerbund, etc.

The state also clarifies what is NOT considered a uniform and must be paid for by the worker. Certain colors for tops and bottoms are considered common:

• Tops: white, tan or blue, including lighter or darker colors of tan or blue.
• Bottoms: tan, black, blue, or gray, including lighter or darker colors of tan, blue, or gray.

Even if the business requires these colors, it does not have to pay for this wearing apparel. For example: The most common colors required are a white blouse or shirt and black pants or skirts. Workers must buy this wearing apparel even though it is required by the business.

If the clothing is a common color but also has a logo or other feature that identifies the worker with the business, then it is still considered a uniform and the business is responsible for the cost of the clothing. For example: A white shirt with a logo. The logo makes the white shirt a uniform and the business must bear the cost.

State

Contact

Washington Department of Labor and Industries

Regulations

Revised Code of Washington Title 49, §49.48.010. Payment of wages due to employee ceasing work to be at end of pay period — Exceptions — Authorized deductions or withholdings

Washington Administrative Code 296-126-025. Deductions from final wages

Washington Administrative Code 296-126-028. Wage deductions during on-going employment

Revised Code of Washington Title 49, §49.12.450. Compensation for required employee work apparel — Exceptions — Changes — Rules — Expiration of subsection

Revised Code of Washington Title 50, §50.40.010. Wavier of rights void

Revised Code of Washington Title 51, §51.16.140. Premium liability of worker

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