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June 29, 2018
 Illegal deductions
Illegal deductions of employee wages is one of the most common violations of Minnesota's wage and hour laws we encounter in the Labor Standards unit.
Deducting an employee's wages without written consent is a form of wage theft and is illegal.
Below are some practices you should follow to ensure your business is in compliance with the Minnesota Fair Labor Standards Act regarding deductions.
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Deductions that cannot be made
Employers cannot deduct from an employee's wages for:
- faulty workmanship;
- loss;
- theft;
- damage; or
- general debts.
This applies whether the deduction is taken directly from payroll or indirectly by an employer requiring an employee to pay.
Deductions that can be made
Employers may deduct from wages only when:
- the employee voluntarily authorizes the deduction in writing;
- the written authorization is given by the employee after the loss or debt has occurred; and
- the deduction is taken out of wages at a set amount each pay period.
Also, any deduction made must not bring the employee's wages below the minimum wage for all hours worked.
Employers looking to recoup the cost of purchases or loans made to employees must also obtain a voluntary, written authorization. However, in this case, the employer may obtain the authorization before the purchase or loan is made.
Limited deduction allowed for uniforms, supplies, more
Employers may deduct a maximum of $50 from an employee's wages for:
- purchased or rented uniforms required for the job;
- purchased or rented equipment used to do the job;
- consumable supplies used to do the job; and
- travel expenses incurred for work.
Further limits on these deduction
The maximum $50 deduction from an employees wages for the above is throughout the employee's career.
The $50 deduction must be paid back to the employee upon separation of employment.
Deductions made without written employee authorization
Employers may deduct from an employee's wages without the employee's authorization when:
- the employer has a judgment against an employee issued from a court of law; or
- a collective bargaining agreement provides for an authorized deduction.
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