Can a loan set up to come out of a payroll check be taken out in one lump sum after it was never taken out when it should have been?

Asked on August 21, 2012 under Employment Labor Law, Minnesota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

No. Employers may only deduct money from employee payroll with employee consent or agreement. That means that if an employee does agree to loan repayment from his/her payroll, the employer cannot change the terms of that repayment, and cannot take out money as a lump sum when it was to be taken out in installments. If the employer forgot to take out some installments, the employer could most likely simply start taking them out and extend the amount of time that installments are taken out, until it catches up--but it can't switch to a lump sum withdrawal.


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