Are you making improper deductions from employees’ pay without even realizing it? Have you ever had a manager who is consistently late and you want to impose a fine equal to 15 minutes of pay for each occurrence? Or an hourly employee who loses or destroys company tools or equipment and you want them to pay you back for what they broke? What about an employee who resigns while he or she has a negative leave balance? In all these situations, making a deduction from pay makes logical sense. But these deductions may be contrary to wage and hour law.
First, many states have laws requiring employers to obtain employee authorization prior to making deductions from pay. The Ohio wage and hour statutes refer to “employee authorized deductions” generally and specifically require employers to have express authorization before making deductions for damage to tools or equipment. See Ohio Rev. Code §§ 4113.15; 4113.19. Pay careful attention to state law before you make any deductions from pay! You should also consider including a general deductions policy in your handbook, and realize that you may need to obtain specific waivers for certain deductions from pay.