Can an Employer Deduct Wages for Mistakes in Florida

When can you dock your employees' wages for mistakes, damages or theft? Non knowing the reply to this question tin can cost you.

By Laurie E. Meyer

• Your employee negligently damages company property, resulting in the company being charged a significant deductible by the insurance visitor when you submit a claim for the costs of the repair.
• Your cashier'southward drawer is short at the stop of the twenty-four hour period because he mistakenly gave a customer as well much change.
• Your employee fails to return a visitor phone that was assigned to her when she leaves the visitor.

Can yous legally deduct these losses from the employee's paycheck?

Wisconsin employers should tread carefully before unilaterally deciding to deduct from employees' paychecks for mistakes, damages caused past employee negligence, cash annals shortages, or even theft. While the federal Fair Labor Standards Act allows employers to deduct from an employee'southward wages every bit long as the deductions don't cause the employee to fall beneath minimum wage, the same is not true under Wisconsin police. In 1931, the Wisconsin Legislature created Wisconsin Statute Department 103.455, which prohibits employers from making any deductions from "earned wages" for "defective or faulty workmanship, lost or stolen property, or damage to property" unless one of three exceptions applies.

First Exception: No "Blanket Pre-Authorizations"

The first exception allows employers to make deductions if the employee "authorizes the employer in writing to make the deduction, after the loss has occurred and before the deduction is fabricated." Employers may be tempted to require a "pre-authorization" for such deductions at the time of hire or at some other time earlier any losses have occurred, or otherwise condition hire or compensation on a written "pre-authorization." However, in Erdman v. Jovoco, Inc., the Wisconsin Supreme Courtroom held that "blanket authorizations at the fourth dimension of hiring are not contemplated by the statute" and thus practise not satisfy the exception. Rather, consent for the deduction must be given in writing afterwards the loss has occurred and before the deduction is fabricated. It also bears mention that the Erdman courtroom found that the word "wages" in the statute "encompasses a variety of forms of employee remuneration" and includes commissions, non but hourly wages or salaries. Hence, regardless of the form of the compensation, no "blanket pre-authorization" will permit a unilateral deduction from the employee'southward pay.

2d Exception: If Employer and Employee Agree as to Cause Of Loss—After Information technology Occurs

The second exception applies if "the employer and the employee'due south representative determine that lacking or faulty work, loss or theft, or damage is the result of the employee's negligence, abandon, or willful and intentional conduct." By definition, therefore, the authorization tin only occur by understanding between the employer and employee later the loss has occurred, every bit this exception provides the employee with an opportunity to dispute the deduction. If the employer and employee disagree about the cause of the loss or whether the employer can make the deduction, the employer still may not unilaterally make the deduction. Instead, the employer's only recourse is to submit the dispute to the Wisconsin Department of Workforce Development for a ruling on the thing, which can then be appealed to circuit court.

Third Exception: A Court Ruling

Similarly, the third exception requires a finding by "a court of competent jurisdiction" that the employee is "guilty or held liable " for the loss "by reason of the employee'due south negligence, carelessness, or willful and intentional misconduct." Needless to say, near employers will non seek such a court finding in the absence of a sizeable loss. Moreover, obtaining such a finding before wages are due to the employee is unlikely.

Penalties for Improper Deductions

If an employer makes a deduction or takes a credit in violation of the statute, the employee tin can go straight to courtroom (bypassing the bureau) to bring an activeness against the employer, and the employer can be held liable for twice the amount of the deduction or credit. Employers may also not terminate or otherwise discriminate against an employee for refusing to authorize such a deduction or for making a complaint alleging an improper wage deduction. An employee terminated in violation of the statute can bring a merits for wrongful discharge and the employer can be held liable for the terminated employee's lost wages.

Statute Doesn't Apply for Mistaken Overpayment of Wages or Expenses

Importantly, the statute does not apply when an employer overpays wages or expenses to an employee by mistake, nor does information technology utilise when an employee overextends his or her draw just refuses to repay the employer or allow the employer to outset such payment against future payments. Under those circumstances, even when at that place withal exists a dispute betwixt employer and employee, the employer tin lawfully discipline or even terminate the employee.

Employers Can Notwithstanding Discipline Employees for Negligence, Theft, and Harm

Before making whatever deduction, employers may also confront an employee suspected of a loss or damage (that may occur) and request an say-so. If the employee refuses to give an authority, the employer'southward only options are to go on to negotiate with the employee or his or her representative or seek a court ruling. However, when at that place is such a dispute, under no circumstances should the employer end or otherwise discipline the employee for refusing to allow the deduction.

Of course, nothing in the statute prevents an employer from disciplining an employee for faulty piece of work, negligence, dishonesty, theft, and the like. Employers should be sure to train employees on the requirements of their jobs and instruct them that faulty performance and improper conduct will effect in discipline. When a loss occurs, rather than making unilateral wage deductions, employers tin can and should document incidents of poor performance, negligence, or other behave that consequence in a loss and subject field appropriately.

Delight contact your Davis & Kuelthau attorney, the author noted above or the related practice group chair linked here if you take any questions.

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Source: https://www.dkattorneys.com/publications/when-can-you-dock-your-employees-wages-for-mistakes-damages-or-theft-not-knowing-the-answer-to-this-question-can-cost-you/

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