If an employee has borrowed money from their employer and has agreed to pay it back but has failed to do so, can the employer withhold a paycheck if after 2 months?

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If an employee has borrowed money from their employer and has agreed to pay it back but has failed to do so, can the employer withhold a paycheck if after 2 months?

Asked on September 8, 2015 under Employment Labor Law, Kansas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

No, the employer may not withhold the paycheck except with employee consent i.e. if she agrees to give up her paycheck as repayment the labor laws require employers to always pay their employees, and the employer's claim for the unpaid loan is separate and distinct from obligation to pay wages. If the employee owes you money and will not repay it, the legal way to seek payment is by suing her for the money, not by withholding pay. If you withhold pay illegally, she may sue you and/or file a complaint with the labor department.


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