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Question: An employee just damaged our property. We have a policy that makes this a code of conduct violation. We would like to discipline her and deduct from her wages an amount equal to the damages. Problems?

Answer: At least partially, yes.

On the discipline, if you have a practice or policy that makes this a code of conduct violation then yes, you should be able to discipline this person without running afoul of federal and probably most state laws. This sort of policy is reasonable and non-discriminatory on its face, so disciplining would appear appropriate.

Pronouncing your employee guilty of a code of conduct violation does nothing to empower you to deduct from her wages. Minnesota and many, if not most, states require that absent a court order before an employer can lawfully deduct wages, the employee must authorize the deduction in writing. Some states, like Minnesota, require that this authorization be completed after the incident has occurred and that the amount of the deduction be spelled out in detail for the authorization to be legally enforceable. Moreover, the amount of the deduction is often limited to the state and federal, whichever is lower, to the established garnishment level. For example, the federal garnishment maximum is the lower of 25% of the employee’s disposable earnings or 30x the federal minimum wage. Some states have even more restrictive garnishment laws that you will need to be cognizant of before you deduct wages.

This is a complicated area and caution is advised any time you deduct from wages no matter the reason, justified by the circumstances or not.

Thompson Coe and myHRgenius Tip of the Week is not intended as a solicitation, does not constitute legal advice, and does not establish an attorney-client relationship.


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