Can we deduct wages to cover unpaid-for employee purchases following termination? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Can we deduct wages to cover unpaid-for employee purchases following termination?

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in Compensation and Benefits,Human Resources

Q. Our company allows employees to purchase products on an installment basis. When employees leave and haven’t repaid the full amount, can we deduct the remainder due from their last paycheck?

A. Yes, you may deduct money owed from the last paycheck as long as the employee has authorized the deduction in writing, and the deduction does not bring the check below minimum wage.

Employers can deduct for employee purchases of goods, wares, merchandise, services, facilities, rent or similar items from third parties not owned, affiliated or controlled directly or indirectly by the employer if the employee authorizes such deductions in writing. (34 Pa. Code § 9.1) 

However, employers are not permitted to deduct below the minimum wage for an expense or charge that was required or authorized by the employer in connection with the employee’s performance of the duties assigned by the employer. (34 Pa. Code § 9.2.)

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