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Can we make employee pay cost of lost BlackBerry through payroll deductions?

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in Compensation and Benefits,Human Resources,Small Business Tax,Small Business Tax Deduction Strategies

Q. Our company has BlackBerry phones and laptop computers available for employees to use when traveling. One of our employees recently took a company-issued BlackBerry with him on a business trip. The employee lost the BlackBerry while out on the town, and the company would like to have him pay for a replacement. Can we deduct the cost of a replacement BlackBerry from his paycheck?

A. Under Minnesota Statute § 181.79, subd. 1, an employer may make a deduction from an employee’s wages to recover lost or stolen property only after the employee has voluntarily consented to the deduction in writing after the loss has occurred.

Therefore, in order to deduct the cost from your employee’s paycheck, you must first obtain written authorization from the employee. The written authorization should set forth the amount that you will be deducting from each paycheck.

Also, the deduction may not exceed the amount established by law that is subject to garnishment or execution on wages. In Minnesota, only that portion of an employee’s wages that exceeds 40 times the federal minimum wage on a weekly basis, after deduction of required state and federal income tax and Social Security and Medicare withholdings, are subject to garnishment. This same garnishment limitation applies to any deductions from employee wages for lost or stolen property.

Employers need to keep this limitation in mind when they seek to make deductions from the wages of employees, and especially for employees who are earning at or near the minimum wage.

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