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Can they keep his final paycheck??

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  • Can they keep his final paycheck??

    Ok, I'm gonna try to explain this the best I can......

    My husbands employer gave him a loan back in July. There were papers drawn up that so much would be taken out weekly until paid off unless he was fired or quit, then the whole balance would then be due. Well, he got a better job and now they want the loan balance paid. I understand that BUT my QUESTION is:

    Can they keep his final check to put towards the balance of the loan? There was nothing mentioned in the papers that were drawn up about them doing this upon him resigning or being terminated. I've checked the Labor Board Laws and it says they can't, but I don't understand one part of the law.....here is the link and the part I would like explained is A3

    http://www.legis.state.la.us/lss/lss.asp...

    Can anyone help me????

  • #2
    Your link does not take me to a specific part of the Louisiana Code, but to the listing of all the codes.

    Some states would not allow an employer to recoup the advance pay upon termination. That is why companies should not be banks and employees in difficulty need to find other avenues to solve the problem.

    I won't search the Louisiana code to find something supporting you or stating that you have no case.

    Give me a better link and I may be able to give my non-legal opinion on the law.
    Senior Professional in Human Resources and Certified Staffing Professional with over 30 years experience. Any advice provided is based upon experience and education, but does not constitute legal advice.

    Comment


    • #3
      Here you go.....

      http://www.legis.state.la.us/lss/lss.asp?doc=83945

      Here is a copy and paste of the website.......


      CHAPTER 6. PAYMENT OF EMPLOYEES

      §631. Discharge or resignation of employees; payment after termination of employment

      A.(1)(a) Upon the discharge of any laborer or other employee of any kind whatever, it shall be the duty of the person employing such laborer or other employee to pay the amount then due under the terms of employment, whether the employment is by the hour, day, week, or month, on or before the next regular payday or no later than fifteen days following the date of discharge, whichever occurs first.

      (b) Upon the resignation of any laborer or other employee of any kind whatever, it shall be the duty of the person employing such laborer or other employee to pay the amount then due under the terms of employment, whether the employment is by the hour, day, week, or month, on or before the next regular payday for the pay cycle during which the employee was working at the time of separation or no later than fifteen days following the date of resignation, whichever occurs first.

      (2) Payment shall be made at the place and in the manner which has been customary during the employment, except that payment may be made via United States mail to the laborer or other employee, provided postage has been prepaid and the envelope properly addressed with the employee's or laborer's current address as shown in the employer's records. In the event payment is made by mail the employer shall be deemed to have made such payment when it is mailed. The timeliness of the mailing may be shown by an official United States postmark or other official documentation from the United States Postal Service.

      (3) The provisions of this Subsection shall not apply when there is a collective bargaining agreement between the employer and the laborer or other employee which provides otherwise.

      B. In the event of a dispute as to the amount due under this Section, the employer shall pay the undisputed portion of the amount due as provided for in Subsection A of this Section. The employee shall have the right to file an action to enforce such a wage claim and proceed pursuant to Code of Civil Procedure Article 2592.

      C. With respect to interstate common carriers by rail, a legal holiday shall not be considered in computing the fifteen-day period provided for in Subsection A of this Section.

      D.(1) For purposes of this Section, vacation pay will be considered an amount then due only if, in accordance with the stated vacation policy of the person employing such laborer or other employee, both of the following apply:

      (a) The laborer or other employee is deemed eligible for and has accrued the right to take vacation time with pay.

      (b) The laborer or other employee has not taken or been compensated for the vacation time as of the date of the discharge or resignation.

      (2) The provisions of this Subsection shall not be interpreted to allow the forfeiture of any vacation pay actually earned by an employee pursuant to the employer's policy.

      Amended by Acts 1977, No. 317, §1; Acts 1988, No. 602, §1; Acts 1995, No. 325, §1; Acts 1997, No. 56, §1; Acts 2001, No. 1171, §1; Acts 2003, No. 699, §1.

      Comment


      • #4
        I do not see the part of the law you posted as allowing or prohibiting the employer from recouping the loan.

        It could be that the law does not allow that. Get an attorney or file in small claims.

        Good luck. I think it will be difficult to convince the judge in small claims that the deduction from the final paycheck should be disallowed if the loan has not been paid in full.
        Senior Professional in Human Resources and Certified Staffing Professional with over 30 years experience. Any advice provided is based upon experience and education, but does not constitute legal advice.

        Comment


        • #5
          What does repayment he signed say exactly?
          http://www.parentnook.com/forum/

          Comment


          • #6
            The one thing I can tell you is that under Federal law, they cannot keep his entire paycheck. They must pay him at least minimum wage times hours worked. How much of the balance they can deduct is something I will leave to the payroll people to figure out.
            The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

            Comment


            • #7
              Having said that, however, the employee DID authorize the deduction. Generally speaking, authorized voluntary deductions CAN take the employee below minimum wage, to my understanding.

              DAW?
              I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

              Comment


              • #8
                Probably. The poorly written federal DOL help sheet and the even more poorly written related regulations (29 CFR 531.xxx) are less then clear on this point. The employer needs to argue that the deduction is for "the benefit of the employee" and try to find some examples that supports the employer's read on things. An employee loan would seem to qualify. And of course then the employer would need to hope that state law is not more favorable to the employee then federal law.

                The employee obviously is pulling on the opposite end of this rope. They would need to argue that the loan was not for their benefit, or that there is some state law more favorable to them then federal law.

                Since this is someone talking for the employee who posted the question, the obvious possible solution is to file a wage claim with federal DOL. Might work. Might not. However, the employer can still just take the employee to court for any unpaid amounts (plus court costs and maybe attornies fees and interest).

                If the employee really owed this money to the employer, the possibility of winning a wage claim might be more then offset by the possibility of brassing of the employer enough to go to court.

                http://www.dol.gov/esa/regs/compliance/whd/whdfs16.htm
                "Reality is that which, when you stop believing in it, doesn't go away".
                Philip K. **** (1928-1982)

                Comment


                • #9
                  Originally posted by cbg View Post
                  The one thing I can tell you is that under Federal law, they cannot keep his entire paycheck. They must pay him at least minimum wage times hours worked. How much of the balance they can deduct is something I will leave to the payroll people to figure out.
                  ……….or state, if state minimum wage exceeds federal. Louisiana courts frown on an employer loaning money to an employee with repayment by wage deductions.

                  Comment


                  • #10
                    Originally posted by joec
                    If you signed papers the employer is solid ground.
                    JoeC


                    RS 23:631 Louisiana State Legislature



                    CHAPTER 6. PAYMENT OF EMPLOYEES

                    §631. Discharge or resignation of employees; payment after termination of employment
                    A.(1)(a) Upon the discharge of any laborer or other employee of any kind whatever, it shall be the duty of the person employing such laborer or other employee to pay the amount then due under the terms of employment, whether the employment is by the hour, day, week, or month, on or before the next regular payday or no later than fifteen days following the date of discharge, whichever occurs first.
                    (b) Upon the resignation of any laborer or other employee of any kind whatever, it shall be the duty of the person employing such laborer or other employee to pay the amount then due under the terms of employment, whether the employment is by the hour, day, week, or month, on or before the next regular payday for the pay cycle during which the employee was working at the time of separation or no later than fifteen days following the date of resignation, whichever occurs first.
                    (2) Payment shall be made at the place and in the manner which has been customary during the employment, except that payment may be made via United States mail to the laborer or other employee, provided postage has been prepaid and the envelope properly addressed with the employee's or laborer's current address as shown in the employer's records. In the event payment is made by mail the employer shall be deemed to have made such payment when it is mailed. The timeliness of the mailing may be shown by an official United States postmark or other official documentation from the United States Postal Service.
                    (3) The provisions of this Subsection shall not apply when there is a collective bargaining agreement between the employer and the laborer or other employee which provides otherwise.
                    B. In the event of a dispute as to the amount due under this Section, the employer shall pay the undisputed portion of the amount due as provided for in Subsection A of this Section. The employee shall have the right to file an action to enforce such a wage claim and proceed pursuant to Code of Civil Procedure Article 2592

                    Comment


                    • #11
                      Nothing in there references loans or OP's personal agreement to repay
                      http://www.parentnook.com/forum/

                      Comment


                      • #12
                        There are two issues here that have conflict with each other. The OP took out a loan and made an agreement to repay and the method of how that was to be done. He has resigned before the loan was repaid. Now according the LA law OP must be paid, however the loan and the repayment agreement throw a monkey wrench into whole thing. So does the repayment contract agreement stand or must OP be paid in full his wages as law says? If you go by law (which does not mention loans) the the employer should eat the money for the loan? Should the employer seek to get the monies through court costing employer even more? I am not taking a side either way just saying you have two issues that would never meet expect for this type of situation. I have to think a smart employer would protect himself somehow in the case that the employee (who took out loan) quit, was fired etc.
                        Last edited by panther10758; 12-15-2007, 07:05 PM.
                        http://www.parentnook.com/forum/

                        Comment


                        • #13
                          Originally posted by panther10758 View Post
                          Nothing in there references loans or OP's personal agreement to repay
                          See “(3)b”
                          In Louisiana, a civil code does not have to fit the EXACT situation.
                          I`ll run the reference down (CCP2592)-----and it will surely confuse us more.

                          Comment


                          • #14
                            We had gone through much of this on a Louisiana law forum. Joec is correct----with the addition that the repayment can not fall below the prevailing minimum wage…To say, the deduction can not leave the employee with less than his hours worked times min. wage. If this does not satisfy the debt, then further action can be taken by the employer. Small Claims Court or etc. Maybe this is exclusive to La.

                            Comment


                            • #15
                              RS 13:3881


                              §38
                              81. General exemptions from seizure
                              A. The following income or property of a debtor is exempt from seizure under any writ, mandate, or process whatsoever, except as otherwise herein provided:
                              (1)(a) Seventy-five percent of his disposable earnings for any week, but in no case shall this exemption be less than an amount in disposable earnings which is equal to thirty times the federal minimum hourly wage in effect at the time the earnings are payable or a multiple or fraction thereof, according to whether the employee's pay period is greater or less than one week.

                              Comment

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