Compliance

Employee payroll deductions

What can I deduct from my employee's paycheck?

There are a number of reasons you may want to make deductions from an employee’s paycheck. Perhaps you want to recover the cost of uniforms or tools. Maybe an employee has destroyed property, or their cash register is short at the end of their shift. Or it could be that you advanced wages to a struggling employee. Knowing when, where, and how much you can deduct from an employee’s paycheck can save you time and money, not to mention protect your company’s reputation.

First, to clarify, this Paycheck Deductions post does not refer to mandatory deductions, such as federal and state income tax withholding, FICA taxes, local taxes for things like unemployment insurance, and court-ordered child support payments. Nor does it refer to common voluntary deductions that an employee authorized for insurance premiums and retirement contributions.

Knowing when, where, and how much you can deduct from an employee’s paycheck can save you time and money, not to mention protect your company’s reputation.

While it is equally important to understand the function of such deductions and obtain written authorization where required, generally speaking, the law allows employers to make deductions that are for the benefit of the employee.

Under federal law, with limited exceptions, employers may generally make deductions from employee paychecks, as long as the deductions don’t bring the employee’s earnings below the minimum wage. Some states, however, are more protective and prohibit employers from passing certain business costs on to employees or require employers to follow certain rules when making deductions. In this Paycheck Deductions blog series, we will discuss deductions for tools and equipment, uniforms, cash shortages and property damage, and employee debts.

Deductions for uniforms, state by state.

Under federal law, employers may deduct the cost of a uniform (including the cost of having it cleaned and pressed) from an employee’s paycheck, as long as the deduction doesn’t cause the employee’s wages to fall below the minimum wage. Accordingly, if an employee is only paid minimum wage, an employer may not deduct from his or her wages in order to pay for a uniform. Some states impose additional rules regarding deductions for uniforms, or prohibit them altogether. These are in addition to the prohibition on any such deductions that would bring an employee’s pay below the applicable minimum wage.

Alaska

In Alaska, for example, an employer must pay for the uniform if it is required by law (for safety, etc.), or if it is distinctive and advertises or is associated with the products or services of the employer, or cannot be worn or used during the employee’s normal social activities.

California

California employers are responsible for the cost of purchasing and maintaining required uniforms, meaning any apparel or accessories of a distinctive design or color. Employers can, however, specify basic wardrobe items which are usual and generally usable in the occupation, such as white shirts, dark pants, and black shoes, all of unspecified design, without furnishing such items at the employer’s expense.

California employers are responsible for the cost of purchasing and maintaining required uniforms, meaning any apparel or accessories of a distinctive design or color.

Colorado

In Colorado, employers must cover the cost of uniforms that are required as a condition of employment. If the uniform is plain and washable and does not need or require special care, such as ironing, dry cleaning, or pressing, the employer does not need to maintain the uniform or pay for its cleaning. Clothing accepted as ordinary street wear that is plain and washable need not be furnished by the employer. If a special color, make, pattern, logo, or material is required, the employer must furnish the uniform.

An employer may require a reasonable deposit (up to one-half the actual cost) as security for the return of each uniform furnished to employees upon issuance of a receipt to the employee for such deposit. The entire deposit must be returned to the employee when the uniform is returned, and the cost of ordinary wear and tear cannot be deducted from the employee’s wages or the deposit.

Washington D.C.

Employers in the District of Columbia must pay the cost of purchase, maintenance, and cleaning of uniforms and protective clothing required by employer or by law or pay the employee 15 cents per hour in addition to the minimum wage (maximum required is $6.00 per week) for washable uniforms. When the employer purchases and the employee maintains washable uniforms, the additional payment required is 10 cents per hour. When the employer cleans and maintains but the employee purchases, the additional payment required is 8 cents per hour.

In Idaho, there is no law explicitly prohibiting employers from passing along the cost of uniforms to their employees.

Idaho

In Idaho, there is no law explicitly prohibiting employers from passing along the cost of uniforms to their employees. There is slight risk, however, that requiring an employee to expend his or her wages in a certain manner (to buy uniforms, for example) could violate Idaho Code § 44-902, and therefore a conservative approach would be to purchase uniforms for Idaho employees. If an employer opts to make deductions for uniform expenses, the employee’s written consent is required.

Illinois

Illinois employers may not deduct the cost of purchasing and/or cleaning uniforms required by the employer from an employee’s wages or final compensation, unless the employee’s express written consent is given freely at the time the deduction is made. Distinctive outfits or accessories, or both, intended to identify the employee with a specific employer are considered uniforms. If an employer requires a general type of ordinary basic street clothing to be worn, but permits variations in the detail of dress, this shall not be considered a uniform. However, when an employer requires that an employee purchase street clothes either from the employer or from a third party designated by the employer, the clothing is considered a uniform.

Indiana

Indiana law requires written consent, revocable at any time, from employees for deductions covering the cost of uniforms to be lawful. The total amount of deductions for uniforms may not exceed the lesser of: (A) two thousand five hundred dollars ($2,500) per year; or (B) five percent (5%) of the employee’s weekly disposable earnings.

Iowa

In Iowa, employers may not deduct the cost of personal protective equipment from wages, other than items of clothing or footwear which may be used by an employee during nonworking hours.

Kansas

Kansas administrative regulations forbid deductions for uniforms, special tools, or special equipment that are not necessary to the performance of the assigned duties and that are customarily supplied by the employer.

Maryland

In Maryland, the cost of providing and maintaining a uniform which bears the name or logo of the employer may generally be passed on to an employee through a wage deduction, with the employee’s signed written authorization. An employee may also be held responsible for the depreciated value of the uniform if it is not returned as required.

Massachusetts

An employee or prospective employee in Massachusetts who is required to purchase or rent a uniform must be reimbursed for the actual purchase or rental cost of the uniform, and the employer may not withhold a deposit for the uniform. Moreover, employers who require uniforms must reimburse employees for the actual costs of dry-cleaning, commercial laundering, or other special treatment, where required. Where uniforms are made of “wash and wear” materials, that do not require special treatment, and that are routinely washed and dried with other personal garments, the employer need not reimburse the employee for uniform maintenance costs.

Massachusetts considers all special apparel, including footwear, which is worn by an employee as a condition of employment to be a uniform. It shall be presumed that a uniform worn by an employee of any establishment is worn as a condition of employment if the uniform is of similar design, color, or material, or it forms part of the decorative pattern of the establishment to distinguish a person as an employee of the place of work. Where an employer requires a general type of basic street clothing, permits variation in details of dress, and the employee chooses the specific type and style of clothing, this clothing shall not be considered a uniform.

Minnesota

Minnesota employers can deduct, directly or indirectly, up to $50 for uniform expenses from an employee’s paycheck, but must reimburse it upon the employee leaving the company. The employer can require a separating employee to return the uniform to the employer.

Montana

Montana allows reasonable deductions for board, room, and other incidentals supplied by the employer, whenever the deductions are a part of the conditions of employment for the primary benefit of the employee, or as otherwise provided for by law. As uniforms primarily benefit the employer, the employer should cover the cost and not make deductions for required uniforms.

Nevada

In Nevada, all uniforms or accessories distinctive as to style, color, or material must be furnished by the employer without cost to employees. If a uniform or accessory requires a special cleaning process, and cannot be easily laundered by an employee, the employer must clean the uniform or accessory without cost to the employee.

New Hampshire

New Hampshire employers may not require employees to wear uniforms unless the employer provides each employee with the uniform at no cost whatsoever to the employee. A uniform is a garment required by the employer with a company logo or fashion of distinctive design, worn by one or more employees, and serving as a means of identification or distinction.

New Jersey

In New Jersey, employers may not require employees to buy or pay for a uniform that has a company logo or is unsuitable for street wear. If the uniform items are appropriate for street wear, the employer must pay for any uniforms beyond the first set required in any given year. In charging for the first uniform, the employer may not deduct the cost from employees’ pay, and if the amount the employee must pay for the uniform brings the employee below the minimum wage, the employer shall make up the difference for the minimum wage for that week.

In New York, employers must pay for required uniforms.

New York

In New York, employers must pay for required uniforms. An employer must also either launder required uniforms or provide employees with an allowance to launder their own uniforms. A required uniform is clothing worn by an employee at the request of the employer while performing job-related duties, but does not include clothing that may be worn as part of an employee’s ordinary wardrobe.

North Carolina

In North Carolina, an employer who plans to deduct the known and agreed upon cost of a uniform from the employee’s wages must have written authorization from the employee. This authorization must be signed on or before the pay period from which the deduction is made; and it must state the actual dollar amount of and reason for the deduction.

When the amount of the proposed deduction is not known and agreed upon in advance, the employer must have written authorization from the employee which is signed on or before the payday(s) for the pay period(s) from which the deduction is to be made and indicates the reason for the deduction. Prior to making any of the latter deductions, the employer must provide the employee with advance written notice of the actual amount to be deducted and the employee’s right to withdraw the authorization. The employee must also be given a reasonable opportunity to withdraw the authorization in writing.

Oklahoma

In order to make a proper deduction to compensate for the value of uniforms in Oklahoma, employers must obtain a separate wage reduction agreement signed by the employee authorizing such deduction.

Oregon

Similarly, an Oregon employer intending to deduct the cost of a uniform from an employee’s paycheck must first obtain a voluntary, signed written authorization to make the deduction.

South Carolina

In South Carolina, an employer can require an employee to purchase a uniform, but the employer must provide 7 calendar days’ notice (or written notice at the time of hiring) if the employer intends to deduct the cost of the uniform from the employee’s paycheck.

Vermont

In Vermont, an employer may not deduct from an employee’s wage any amount for providing or maintaining required apparel, including a uniform, nor shall any other compensation pass to any employer from an employee for required apparel, including a uniform or the maintenance thereof, unless the employee voluntarily consents to such deduction or compensation in writing and such deduction does not reduce the total remuneration received by an employee below the hourly minimum wage, include any administrative fees or charges, or amend, nullify or violate the terms and conditions of any collective bargaining agreement.

Virginia

Virginia employers must obtain a voluntary, written authorization signed by the employee in order to deduct the cost of the uniform from the employee’s paycheck.

Washington

In Washington, an employer must furnish clothing that is a “uniform,” which is defined as apparel of a distinctive style and quality that, when worn outside of the workplace, clearly identifies the person as an employee of a specific employer, or specially marked with an employer’s logo, unique apparel to identify historical or ethnic background, or formal attire. An employer can require other clothing of any particular style and color that is not a uniform without paying for it.

In all cases, even where not specifically prohibited by state law, employers should obtain voluntary, written consent from employees before making wage deductions for the cost of uniforms. Stay tuned over the next few weeks for additional information on deductions for tools and equipment, cash shortages and property damage, and employee debts in our Paycheck Deductions blog series.

Final Note

This blog article is intended for general informational purposes only and should not be construed as legal advice or opinion. Contact myHRcounsel with questions concerning specific facts and circumstances.