Personal Finance 

Payroll Deductions for Penalties Usually Not Legal

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Late last year, Consumerist found, via Reddit (I did a search but couldn’t find it), a photo of a list of infractions subject to payroll deductions from a Jet’s Pizza. If you were found with drinks or food in the kitchen area, expect to lose $5. Wear a ring? $5. Caught using a cell phone would cost you ten bucks, as much as opening or closing the store improperly. It was later revealed that this wasn’t company policy, probably just a local franchisee trying to instill discipline, but it left everyone wondering if it was legal.

As it turns out, this is not legal in a lot of states according to the SHRM (Society for Human Resource Management). For example in Maryland, an employer cannot make a deductions unless: “(1) ordered by a court of competent jurisdiction; (2) authorized expressly in writing by the employee; (3) allowed by the Commissioner because the employee has received full consideration for the deduction; or (4) otherwise made in accordance with any law or any rule or regulation issued by a governmental unit.”

So if a Jet’s Pizza existed here (I don’t think they do), they’d get in trouble if they penalized you for using a cell phone.

This made me wonder about New York, which has similar rules. When I worked as a banquet waiter, there was a $10 deduction on my paycheck for “meals,” regardless of whether or not I actually ate something. It was assumed we’d snack or otherwise eat and so that amount was deducted on every shift. As it turns out, I probably agreed to it (it’s been too long) on one of the forms I signed (thus covering one of the situations New York allows deductions) but I can see how not knowing that could get a company in trouble.

So, if you are penalized by way of a payroll deduction, you might have recourse with your state’s labor department.

{ 4 comments, please add your thoughts now! }

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4 Responses to “Payroll Deductions for Penalties Usually Not Legal”

  1. govenar says:

    What if they don’t deduct from wages, but instead just make the employee pay a fee? Restaurants charge fees for various things like bringing your own bottle of wine, so I’d think that charging fees for employee bad behavior would be legal.

  2. A deduction for a ‘meal’ is one thing, a fine for behavior is another. I wonder if this is a new practice or something that had been going on for a long time…

  3. jd111358 says:

    what about charging you for a lost company badge? Company practice…..1st offrense…badge replaced free….2nd offense $15. A badge is required to enter building…It is an electronic card key that opens the door when you swipe it on door receptacle

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