• LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

Is it permissible to recover education reimbursements from final paychecks?

by on
in FMLA Guidelines,Human Resources

Q. Our company has a program that reimburses employees for work-related educational programs. However, if the employee leaves the company within one year of the reimbursement payment, the employee must repay the company. Can we take this repayment out of the employee’s final paycheck?

A. Maybe. As a general rule, a payment due from an employee is an ordinary debt, creating a creditor-debtor relationship. In such a case, the company must pursue the employee-debtor just like other debtors do. It may not take money out of the employee’s paycheck.

However, the North Carolina Wage and Hour Act does allow wage withholding in certain situations. Assuming the amount paid for an educational program is a set dollar amount, the employee may execute a written authorization for wage withholding that details the monetary amount or percentage of wages to be deducted from one or more paychecks.

However, it is arguable that employee might have a reasonable opportunity to withdraw his or her authorization before the withholding occurs. If the written authorization does not refer to a specific dollar amount, then the company must give the employee advance notice of the specific amount of withholding sought and must give the employee an opportunity to withdraw his or her authorization prior to the withholding deduction. N.C.G.S. § 95-25.8 addresses wage withholding. Proper wage withholding may be difficult to accomplish in these circumstances. 

Like what you've read? ...Republish it and share great business tips!

Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...

We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.

The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.

" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/5913/is-it-permissible-to-recover-education-reimbursements-from-final-paychecks "

Leave a Comment