Deductions from Pay

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There are a variety of reasons an employer might deduct amounts from an employees pay check, only some of which are legal. It is certainly legal to deduct amounts required by law, such as federal and state taxes, Social Security, or a garnishment order, but beyond that it gets murkier.

An employer can deduct other certain amounts if the employee knows when he or she starts the job that they will be deducted. Charges for room and board are allowed if they are agreed upon before employment starts. The employer must charge for the actual cost of providing the housing, not the fair market; in resort areas and around the national parks, this could be a huge difference during the tourist season. “Other incidentals supplied by the employer” can also be deducted, but check with an employment attorney first, just to be sure the charge falls in this category. (Section 41-1301 (2), Revised Codes of Montana 1947)

Then there are all the tempting reasons to withhold wages from an employee: short till, damaged uniform, a stiffed server, damaged equipment, fines caused by worker negligence, business losses caused by the employee’s poor judgment, etc. As tempting as it is, employers are not allowed to deduct for costs of doing business; employees must be paid their full wages, subject to the allowed deductions above. If the employer wants to recover damages, they must pursue it in the courts, not withhold wages. Taking the damages out of a pay check seems easier than going to court, but may land the employer in court with a harder case to make.