{"id":4789,"date":"2016-04-04T10:47:45","date_gmt":"2016-04-04T15:47:45","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/employment-law-and-human-resources\/withholding-money-from-former-employees-paychecks.html"},"modified":"2024-06-06T05:41:30","modified_gmt":"2024-06-06T10:41:30","slug":"withholding-money-from-former-employees-paychecks","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/employment-law-and-human-resources\/withholding-money-from-former-employees-paychecks.html","title":{"rendered":"Withholding Money From Former Employees’ Paychecks"},"content":{"rendered":"\n
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Withholding Money From Former Employees' Paychecks<\/h1>\n
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\n By Susan Buckner, J.D.<\/a> | Legally reviewed by Melissa Bender, Esq.<\/a>\n | Last updated\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

Small business owners know that employee turnover<\/a> is inevitable. Most people don’t stay in one job for life anymore. Employers must know what to do when an employee leaves a job owing money or property.<\/p>\r\n

Can employers withhold money from former employees’ final paychecks<\/a> to recover losses to the business?<\/p>\r\n

State and federal labor laws dictate what employers can and can’t withhold from employee wages, including the final paycheck. Federal laws define what employers may do, but state laws tell them what they can do.<\/p>\r\n

This article discusses what you can and can’t deduct from your employees’ paychecks, including the final paycheck.<\/p>\r\n

To learn more, visit FindLaw’s Wage and Hour Laws<\/a> page.<\/b><\/p>\r\n

Federal Law on Paycheck Withholding<\/h2>\r\n

The Fair Labor Standards Act<\/a> (FLSA) allows employers to make paycheck deductions<\/a> for unreturned company equipment, cash shortages, or damage to the employer’s property. The only requirement under the FLSA is that these deductions don’t reduce the worker’s final pay below the federal minimum wage.<\/p>\r\n

Employers can’t use wage deductions to cover the cost of items<\/a> that benefit the employer. In other words, an employer can’t require workers to buy uniforms or equipment for use on the job and then deduct that cost from their paychecks.<\/p>\r\n

Employers can usually write those costs off as business expenses. If the employer does want the employee to pay for some items, the cost may not cause the wages to fall below the federal minimum wage.<\/p>\r\n

A few examples of things that might come out of an employee’s paycheck include:<\/p>\r\n