Understanding Illegal Deductions

Federal Laws

The Fair Labor Standards Act (FLSA) requires that employees receive at least the federal minimum wage for all hours worked. Employers generally cannot make deductions that would bring wages below this threshold, except in limited circumstances permitted by law.

State Laws

Many states provide additional protections, including:

• Requiring written authorization for certain deductions
• Prohibiting deductions for employer business expenses
• Banning deductions for cash register shortages or damaged equipment

• Deducting the cost of uniforms or equipment when it causes wages to fall below minimum wage
• Withholding pay for cash register shortages
• Charging employees for broken tools or damaged property without proper authorization
• Deducting training costs if an employee leaves before a set period
• Withholding final paychecks as a form of penalty

 Evidence may include:

• Pay stubs showing unauthorized deductions
• Written policies or emails describing deduction practices
• Witness testimony from coworkers about similar deductions

Federal and state laws prohibit employers from retaliating against employees who:

• Question or dispute illegal wage deductions
• File a wage and hour complaint
• Participate in a labor investigation

Retaliation can include termination, demotion, schedule changes, or other adverse actions.

Potential remedies may include:

• Repayment of unlawfully deducted wages
• Liquidated damages equal to the amount of lost wages
• Attorneys’ fees and litigation costs
• Penalties under applicable state wage payment laws

Employers can reduce risk by:

• Following federal and state laws regarding permissible deductions
• Obtaining clear, written authorization from employees where required
• Ensuring deductions never cause pay to fall below the applicable minimum wage
• Providing transparent pay statements showing all deductions

Miller Shah LLP is prepared to evaluate and pursue illegal deduction matters on behalf of employees whose wages have been unlawfully withheld or reduced. The firm’s attorneys assess claims under federal and state wage and hour laws and advocate for remedies to address unlawful pay practices.