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Federal law allows nearly any deduction from the wages of a non-exempt employee, as long as the employee still receives the minimum wage for all hours worked. However, most states impose further restrictions on the permissible deductions.
Almost all states require signed authorization for a deduction from wages. In some states, authorization can be given at the time of hire. In other states, it must be given during the pay period in which the deduction will be made. A few states outright prohibit any deductions unless they are for the benefit of the employee (such as health insurance premiums) or are required by law (such as taxes and garnishments). In most cases, authorization must be voluntary, so employers cannot demand authorization under threat of discharge.
Deductions for things like property damage, uniforms, and medical exams (other than exams required to obtain health insurance) are considered to be for the employer’s benefit, rather than for the employee’s benefit. Even in states where these deductions are allowed, the employee must still receive the minimum wage for all hours worked on the paycheck from which the deduction was made.
In most states, deductions can be made for advances of wages or vacation pay. Often, these deductions can reduce the paycheck to less than minimum wage because the employee has already been paid for hours that have not yet been worked. In essence, the minimum wage restriction is not relevant because the employee has already been given the required compensation. Check your state law, however. For example, California and New York prohibit deductions even for wage advances.
Finally, the allowable deductions from the salaries of exempt employees are strictly limited by federal law, which does not allow deductions for property damage, uniforms, or most other reasons. However, exempt employees can still authorize deductions for their own benefit (such as health insurance premiums or charitable contributions).