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Can employer deduct money owed from last pay if Employee quits before notice period ? Rhode Island South Carolina

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  • Can employer deduct money owed from last pay if Employee quits before notice period ? Rhode Island South Carolina

    If an employer and employee of a small business have a verbal agreement that requires the employee to give a minimum notice period before he quits, but the employee quits way before the required notice period days.. and on top of it owes the employer money ( that he borrowed to pay his bills ), can the employer deduct the money owed plus any losses the employer would incur due to the lack of notice period ? Note:- The employer had hired the employee based on faith and hence had not had the employee sign any written agreement regarding the pay rate or the notice period. Please advice. Thanks in advance.
    Last edited by scuser; 12-17-2007, 10:17 PM.

  • #2
    So, no employment contract requiring a certain amount of notice and no written authorization to deduct amount loaned from final pay?

    In Rhode Island, you cannot deduct from an employee's paycheck anything (other than deductions required by law, such as taxes, child support, etc.) without a written authorization from the employee.

    An employer may not deduct for shortages, damages, rent, uniforms, or any other reason (except applicable taxes). An employer may make a deduction for loan or advance against future earnings if evidenced by a statement in writing signed by the employee with the amount to be deducted each pay period. The statement may read "balance due upon separation".

    South Carolina law is similar, although their website is not very forthcoming.

    Regarding notice, a verbal agreement is unlikely to hold water. What did the employee get out of this "agreement" to provide six weeks notice? A notice of 6 weeks is quite rare, except for mayabe very high-level employees, such as Presidents, CEOs, etc.

    I would recommend learning a lesson from this and 1) if you "require" a certain amount of notice, draw up an employment contract (with an attorney's advice) and 2) get an authorization in writing to deduct from an employee's pay (or better yet, a promissory note).
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    • #3
      Thanks Patty
      Yes, it was definitely a "Lessons Learned" experience !!!


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