withhold final pay for company materials?

mhees10076

Can you legally withhold resigning employees final pay until all confidential materials and company property are returned?

Bizee1

If they are not working a government contract, you can take their pay all the way down to minimum wage, but you cannot withhold their entire pay. If it's a government contract, you cannot withhold anything - period.

PAhr

I'm not sure I would do that. You must notify an employee of any reduction in salary before the reduction takes place. You also cannot make any deductions from the employee's paycheck that will not benefit the employee. Taxes, health insurance, dental, retirement plan.... The only deductions you can legally make that do not benefit the employee are child support payments or any other court ordered deduction. You should check your state laws about the time frame you have to issue a final check. Warn the employee prior to the last day of the things you expect to be returned. On that day you should issue his check. If he still does not return the property you should then take the next legal step. Withholding or reducing his pay is not a wise legal move.

jimlegal

Although it is tempting, I would not withhold any pay. Withholding pay could open a completely new avenue of problems for you. I would demand return of the company property and advise the former employee that I have their check ready. Good luck with your situation.

Crout

Check your State law regarding the payment of wages. Most states have a stipulation that any deducation beyond taxes, etc requires an authorization from the employee. In PA we have all new employees sign a deducation form as part of the Orientation process that says all company property must be returned before the final paycheck is released.

David Nagle VA

Crout is correct. Most states expressly prohibit withholding from pay, except for taxes, garnishments, and child support enforcement orders, without the signed, written authorization of the employee. Contact your counsel or your state department of labor to determine applicable law.

Bizee1

Crout, just an FYI - State 'payment of wages' regs don't hold water to Federal Wage and Hour. You cannot withhold final pay for any reason. You can, however, take their pay down to minimum wage for any hours they worked to compensate the er for any company property not returned. That, or take them to small claims court. If your er is, as you say, withholding final pay checks for any reason, you should call your local DOL Wage & Hour agent for appropriate direction.