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Unauthorized Payroll Deductions Don't Pay Image

Unauthorized Payroll Deductions Don't Pay

Posted by: Cory A. Genelin

“I’m being sued by a former employee. He came back drunk from lunch, crashed his forklift, and destroyed $1,000.00 of product. Our security cameras caught it all and it was clearly his gross negligence that caused the accident. I fired him on the spot and took the $1,000.00 out of his final pay. I’m in the right here…right?”

I get a lot of calls like this and unfortunately, no, that’s not the right thing to do. According to Minnesota Statues 181.79, even if the employer has a valid claim against an employee an employer can only deduct from wages earned if the employee authorizes the deduction in writing. Without such an authorization, you need to pay him the wages owed, and then go after him in court for what he owes you.

Taking an unauthorized deduction can result in a civil fine for twice the amount of the deduction taken. The penalties are worse if the deduction came from a final paycheck to a terminated employee as above. in that case, the penalty could total 15 days’ worth of pay. On top of that, you could end up paying the employee’s attorney fees spent in collection.

Employment law is an area where doing what seems fair isn’t always enough to say out of trouble. Minnesota laws and courts are very protective of workers, especially when it comes to pay. Many of the protections that have been set up in reaction to truly malevolent employers in the past act as traps for unwary, but otherwise decent, employers today.

Published in MN Valley Business Magazine, September 1, 2017

This information is general in nature and should not be construed as tax or legal advice.