Deductions from Employees' Wages: New Regulations Clarify The Do's and Don'ts

January 2006
Employment Law Notes
Employers often find it necessary, and in some cases desirable, to deduct certain sums from their employees’ paychecks, including not only medical insurance and retirement fund payments, but also cash advances, the cost of lost or damaged property, and wage overpayments. As of January 1, 2006, new state regulations define when such deductions are permitted. While consistent with previously existing statutes, the new regulations provide more detailed guidance and include examples as to the deductions that may be made in three different contexts: during employment, at the time of separation, and when the employer has paid an employee too much.