Withholding Final Paycheck

Lisa In Iowa

I work for a wireless provider, and each of our employees are eligible for their own cellular telephone plan. The phone is mostly for business use, but we do allow them to use it for personal reasons. If they do so, and incur charges above the plan, they typically pay for them. Our management team wants to make some changes to say that the company has the right to withold their final paycheck until all charges are paid. I have huge concerns over holding any paychecks. I didn't think we could withhold their final paycheck.

If we created a form for them to sign when they sign up for the phone, could we say that final charges will be deducted from their last paycheck. I have concerns about this, too, but figure if they sign off on it and are aware, then it would be okay. I think this solution is better than withholding their final paycheck.

Thoughts?

ACU Frank

It's going to vary by state. In Missouri, I can do it.

FunHRBanker

You can't have a blanket statement at the beginning of employment saying that you will deduct things from their final paycheck. The consent has to come after the action (resignation or termination) but before the deduction.

Msferra

In Virginia, you cannot hold someone's final paycheck. We have been told that even if they acknowledge the item and cost of items up front, that it can't be taken from the last check. However, if they have benefits, like vacation or paid time off that is due to them, then monies can be taken out of an earned benefits.

ray a

Frank is right, it varies by state. In NY, we can withhold up to 10% of the last check. My boss in MD is able to withhold whatever is owed. Call your local DOL.