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How much can employer deduct for health insurance? California

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  • How much can employer deduct for health insurance? California

    Hi! I'm a newbie here!
    I signed up for health coverage after working for my employer for 3 months. At that time I was told that the deductions would be taken out later and not to worry. Well, 2 months have passed, and the CEO is just now emailing us individually with the amount she'll be taking out for 4 months' coverage. For some of us who've been covered longer than 2 months, it's going to be a huge chunk of their paycheck. We've been asking her to possibly take it out in 3 installments. Is there some kind of guideline for deductions for health benefits as a percentage of your paycheck? Can the employer just go and take out future health payments (in my case I'l be paying out through March). This is a very small company with a very volatile CEO, and the issue of health coverage deductions is just now coming up since no one's ever worked longer than a year here without quitting. Any advice would be appreciated with the statute cited under California Labor Law.

  • #2
    As a general rule pursuant to California Labor Code 224, your employer is not able to legally deduct any health insurance premiums pay from your wages unless you agree to it in writing.
    Barry S. Phillips, CPA

    IRS Circular 230 Disclosure: This response is intended to provide general information and written for educational purposes only. It does not establish a client relationship. This communication is not intended to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to any party any matters addressed herein.


    • #3
      Assuming you agreed in writing (which was probably included in your enrollment paperwork), the entire amount could be deducted in a lump sum. After all, you have received several paychecks from which the deductions should have been made and were not.

      Having said this, I don't disagree that spreading the retroactive amount over several checks isn't a good way to go, and I would probably handle it that way in my profession (payroll). However, there is no law that is going to require the employer comply with your request.
      I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


      • #4
        Your employer has very sloppy payroll practices. You might want to consider your time there to be short-term and when the time is right, look for employment when a more professionally run company.


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