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Legal payroll/vacation deductions

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  • Legal payroll/vacation deductions

    Can a company legally deduct benefits deductions that an employee owes for being out on medical leave from that employee's first pay check when they come back to work if it causes the employee to bring home less than they would have if they had made minimum wage?

    Can you or can you not do this also for the amount owed to a company 401k loan?

    Thanks!

  • #2
    You cannot bring the employee below minimum wage times hours worked, ever. If that means you take benefit deductions out of more than one check, then that's what it means.

    There are others here who can address the order of benefit deductions better than I. (My employer doesn't do 401(k) loan repayments through payroll deduction.)

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    • #3
      Ok, let me ask this, can a person take what they owe out of accrued vacation in the same scenario?

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      • #4
        No, not in your state. It would be legal in some states but Kentucky, like Massachusetts, California, Illinois and a few others, considers earned vacation to be wages.

        You are allowed to require employees to make benefit payments while they are on medical leave. You don't HAVE to let them go unpaid during the leave and then do catch up after the fact. We do.
        Last edited by ladycathryn; 04-10-2018, 09:51 AM.

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        • #5
          So, we can not deduct part of what is owed for benefits out of their accrued vacation? Even if they work that entire week Or, we can as long as they work enough hours the week we take the vacation and apply it toward the benefit debt?

          Sorry, just trying to understand.

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          • #6
            No. You cannot, in your state, take part of what is back-owed for benefits out of their accrued vacation.

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            • #7
              Thank you. Is there somewhere that shows the language you are talking about that I can refer to incase I am asked about it when I bring this up with my superiors?

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