The federal wage and hour law, the Fair Labor Standards Act, mandates that all covered employees be paid at least minimum wage (effective September 1, 1997, $5.15 per hour) for all hours worked, plus time and a half for hours worked in excess of 40 in a seven-day workweek. The FLSA restricts the types of deductions from pay that can potentially reduce an employee's wages below minimum wage, but does not say anything of consequence regarding an employer's obligation to get the employee's authorization for such deductions.

However, most states have their own wage and hour laws that do require employers to have authorization, usually in writing, to take money from employees' paychecks for various purposes. In addition, most of those state laws prohibit any deductions that violate the federal minimum wage and overtime standards, even if the employee has given written authorization for the deductions. Written authorization is not required to make deductions related to court-ordered garnishments (such as child support), payroll taxes, or other deductions required under state or federal law (such as IRS tax levies or guaranteed student loan repayments).

The following form is intended for use in a state that requires employers to have written authorization to make deductions from pay. Since many companies have very individual needs as to the types of pay deductions that may occur, the list is general and shows the types of things employers may wish to include in the forms they adopt for this purpose. Companies with special needs may simply add their own categories to the list they have employees sign, but should exercise caution in ensuring that federal law and their own state laws allow such deduction categories.

I understand and agree that my employer, ___________________________ (the Company), may deduct money from my pay from time to time for reasons that fall into the following categories:

1. my share of the premiums for the Company's group medical/dental plan;
2. any contributions I may make into a retirement or pension plan sponsored, controlled, or managed by the Company;
3. installment payments on loans or wage advances given to me by the Company, and if there is a balance remaining when I leave the Company, the balance of such loans or advances;
4. if I receive an overpayment of wages for any reason, repayment of such overpayments to the Company;
5. the cost to the Company of personal long-distance calls I may make on Company phones or on Company accounts, of personal faxes sent by me using Company equipment or Company accounts, or of non-work related access to the Internet or other computer networks by me using Company equipment or Company accounts;
6. the cost of repairing or replacing any Company supplies, materials, equipment, money, or other property that I may damage (other than normal wear and tear), lose, fail to return, or take without appropriate authorization from the Company during my employment*;
7. the cost of Company uniforms and of cleaning the uniforms**;
8. the reasonable cost or fair value, whichever is less, of meals, lodging, and other facilities furnished to me by the Company in connection with my employment***; and
9. if I take paid vacation or sick leave in advance of the date I would normally be entitled to it and I separate from the Company before accruing time to cover such advance leave, the value of such leave taken in advance that is not so covered.
10. (any other items appropriate for your company's situation - go over this with your attorney).

I agree that the Company may deduct money from my pay under the above circumstances, or if any of the above situations occur.

* (Deductions for this purpose that take the pay below minimum wage are allowed only in the case of misappropriation of money by the employee; in addition, the employer must be able to prove that the employee was personally responsible for the misappropriation.)
** (ELANet cautions that this is a type of deduction restricted by federal wage and hour regulations - see the provision for uniform cost deductions in Part 531 of the regulations (Title 29 of the Code of Federal Regulations, Part 531), and also Section 30c12 of the Department of Labor's Field Operations Handbook.)
*** (See Part 531 of the wage and hour regulations, as well as Sections 30c00 - 30c09 of the Field Operations Handbook.)

Again, it is not recommended to simply adopt this sample form for your situation without first seeking the advice of an employment law attorney. There is almost an infinite variety of forms in use for various kinds of workplaces and different kinds of situations. Moreover, the laws vary widely from state to state in some areas of employee relations. Thus, it is very important to make sure that whatever form you utilize not only truly meets your needs, but also complies with your state's law.

Don't know an attorney? Contact ELANet for information on how to find an attorney concerning the design or review of employment forms for your situation:

© 2000
Employment Law Advisory Network, Inc.