Can a company withhold an employee’s PTO and paycheck for expenses already approved?

My brother-in-law was recently fired for what the company said was gross negligence. Each month he submitted an expense report and his manager was responsible of reviewing and then approving all expenses. At year end they did an audit and now say some of the expenses were not valid. They fired him and withheld is PTO and last paycheck. Since his manager was responsible for approving expenses and he did for every expense report submitted can they now hold back his paycheck and PTO?

Asked on February 21, 2016 under Employment Labor Law, Indiana


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

An employer is not allowed to withhold employee pay, even final pay, because the employer believes the employee owes it money. Rather, its recourse if it believes it was owed money would be to sue the employee for the money. Similarly, an employee whose pay was wrongfully withheld could sue the employer for the money. Depending on how much is owed, suing in small claims court on a pro se (asown attorney) basis is often a fast, inexpensive option.

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