EXEMPT EE Deductions

I received a newsletter in the mail stating we are not allowed to deduct "for the cost of lost or damaged tools or equipment issued to exempt employees (i.e. cell phones, laptops, etc.). It would not matter whether an employer implements such a policy by making periodic deductions from the employee’s salary, or by requiring employees to make out-of-pocket reimbursements from compensation already received."

If my driver loses his pager, he signs a form and has the $25 deductible taken out of his check or gives me $25 cash.

The same thing happens with uniforms. When Johnny quits and does not turn in all of his uniforms originally issued, he signs a form and has the $22.50 deducted from his check for his missing shirt or gives me $22.50 cash.

Our deduction policy is in our handbook. We have a handbook acknowledgement that all full-time new-hires sign. We have a separate Payroll Deduction Policy Form that repeats the deduction policy that all full-time new-hires sign. When we make a deduction that is not court ordered, we make the employee sign a specific deduction form with all of the details pertaining to the deduction. (When, why and how much.)

Does this blow all of my forms out of the water?

Comments

  • 8 Comments sorted by Votes Date Added
  • You need to check your state wage and hour law. In California, you are not allowed to deduct for the types of items you describe. If falls under the cost of doing business. Frustrating, I know. Perhaps if a few employees are terminated for losing pagers, uniforms, etc., it might get their attention.


  • Hr in Ca is correct. This is driven by state law. In NV, we are not allowed to deduct for uniforms, but can deduct for most anything else.
  • Without running the risk of revealing any competition for MLS by telling us the publisher of your newsletter, can you tell us if the newsletter you received was specific to your state or industry, to another state or industry, or generally applied across the board?
  • From my understanding, this is across the board.

    The company has a TN address. On this issue, they are advertising seminars in VA, TN and OH. It is not industry specific, as one of the seminars is for "the Healthcare Professional"...far from hauling beer!
  • I can't find anything in the CFRs. The Federal Regs do address "board, lodging or other facilities" but they're pretty specific on what's included, and there's nothing about deducting from pay - only that the cost of these things may or may not be included when calculating the salary requirements for exemption.

    Is there a court case referenced in your newsletter article?
  • I have to ask: Why is a driver exempt?
  • TITLE 29--LABOR, CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR; PART 541_DEFINING AND DELIMITING THE EXEMPTIONS FOR EXECUTIVE,

    Subpart F_Outside Sales Employees

    Sec. 541.504 Drivers who sell.
    (a) Drivers who deliver products and also sell such products may qualify as exempt outside sales employees only if the employee has a primary duty of making sales. In determining the primary duty of drivers who sell, work performed incidental to and in conjunction with the employee's own outside sales or solicitations, including loading, driving or delivering products, shall be regarded as exempt outside sales work.

  • Unfortunately there is no court case referenced.

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