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Don’t institute payroll deductions without employees’ consent

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

Q. Our plant manager wants to implement a policy requiring employees to pay for lost or damaged equipment through payroll deductions. Can we do that?

A.  While Georgia law is largely silent on this issue, the majority view is that such deductions require the employee’s express consent. In fact, it is prudent to obtain an employee’s written consent before making any deduction or withholding not mandated by law, including those intended as repayment of a loan, reimbursement for damage to or loss of property, or satisfaction of similar employee debts to the employer. Moreover, even with an employee’s consent, employers must avoid making deductions that drop the employee’s compensation below the federally mandated minimum wage levels, including time and a half for any overtime.

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