Is it legal for an employer to deduct earnings from your paycheck as a form of a disciplinary action?

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Is it legal for an employer to deduct earnings from your paycheck as a form of a disciplinary action?

I work for a carpet cleaning company. We recently received an email from owners stating that if we fill out a rug drop off form wrong, they will deduct the cost of the rug from our paycheck. I didn’t pay much attention to this until I noticed that $200 was deducted from my check for this! Two weeks before that one of my co-workers quit because they deducted $600 from his check, and all he forgot to do was sign the slip. This can’t be legal.

Asked on April 16, 2012 under Employment Labor Law, Minnesota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

No, it is not legal to do this without employee consent:

1) An employer may not deduct from an employee's paycheck without the employee's consent or agreement, other than as required by law (e.g. FICA; a garnishment for  child support or delinquent taxes).

2) If the employee does not agree to the penalty, then the employer could not force them to pay, even by suing them--employers may sue their employees for actual losses or damages the employees cause the employer deliberately or through negligence, but may not impose penalties when there is no harm actually done to the employer, unless the employee had agreed to the imposition of penalties (in which case the employer is essentially enforcing a contract).

If your employer has taken money from you or coworkers without your consent, you could sue (including in small claims court) to recover it. What an employer can do if employees violate its rules or do not fill out paperwork correctly is to terminate them--a company can fire employees who don't do what they are supposed to--and since they could be terminated, the employer could do things less than termination, like suspending, demoting, reducing hours, etc. But what it can't do is simply to take money from paychecks.


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