If my boss just started garnishing my wages last month for money he gave me and at the time said I didn’t have to repay, is this legal?

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If my boss just started garnishing my wages last month for money he gave me and at the time said I didn’t have to repay, is this legal?

While working for a company 2 years ago I asked my employer for a loan to buy a car. He said that he would give me the money, with no obligation to pay it back, as long as I didn’t tell any of the other employees. I agreed (of course). He put the cash in a brown paper bag and that was that. At least until last month. I haven’t told anyone about the “gift” but suddenly the owner’s daughter, the accountant for the company, said that her father wants me to pay back the money I “borrowed” from him. So now they are taking $40 a week out of my paychecks until it’s paid in full. When I told her that when her father gave me the money and said that I didn’t have to pay it back, she told me that he didn’t have to give me that money and that I should do the right thing. So for the past 3 paychecks they have been “garnishing” my pay $40. Is this legal? Is there anything I can do?

Asked on December 1, 2011 under Employment Labor Law, Maryland

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

1) If it was a gift at the time it was made, the gift giver (or his agents or representatives) may *not* ask for it back now. A gift may not retroactively be converted into a loan. Only if it was a loan at the time would you have to repay. Whether morally it would be "right" to repay it is a different story--you and the owner's daughter may disagree on that. But legally, if it was a gift when made, you do not need to repay it.

2) Even if you owed the company the money, they can't take it out of your paycheck unless you agreed to that; their recourse would have been to sue you for the money in court.

3) If money is illegal taken out of your paycheck, you may sue for it, including, if appropriate, suing in small claims court (and acting as your own lawyer, to save costs).


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