Deductions from final paycheck
cb499
31 Posts
I'm being told that we cannot deduct, from a final paycheck, for a negative PTO balance. Can someone please point me to the exact location in the FLSA that prohibits this? Thank you!
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[quote user="cb499"]I'm being told that we cannot deduct, from a final paycheck, for a negative PTO balance. Can someone please point me to the exact location in the FLSA that prohibits this? Thank you![/quote]
Hourly or salaried and what state?
How did the PTO balance go negative?
Both. All states, but CA is my driver for most policies. Company policy allows a negative balance.
I think I found it in 541.118(c) which allows for a different final paycheck for reduced hours of work as the only option. Reducing for anything else blows the salary test. Make sense?
Hope this helps. Check our this answer from the the California Department of Industrial Relations' FAQs:
Q. My employer allows its employees to take their vacation before it is actually earned or accrued. Last month I took my three weeks vacation before I had actually earned all of it. I quit my job this month and my employer deducted all of the unearned vacation days that I had taken from my final paycheck. Can he do this?
A.
No, your employer cannot deduct "advanced" vacation (i.e., vacation that is taken before it is earned or accrued) from your final paycheck. Because of work schedules and the wishes of employees, many employers allow employees to take their vacation before it is actually earned. Under California law, vacation benefits are a form of wages, and an employer's practice of allowing employees to take their vacation before it is actually earned or accrued is in effect an advance on wages. Thus, if an employee takes an advance on vacation and then quits or is discharged before all of that advanced vacation is earned or accrued, the effect is that there has been an overpayment of wages which is a debt owed to the employer.
The California courts have noted on a number of occasions that an advance on wages, as with any other debt owed (either to the employer or a third party), is subject to the provisions of the attachment law. However, since wages are exempt from prejudgment attachment, neither the employer nor any third party can recover the debt by way of attachment of the employee's final pay, as to do so would violate the public policy considerations underlying the wage exemption statutes. Thus, in California since the wage garnishment law provides the exclusive judicial procedure by which a judgment creditor can execute against the wages of a judgment debtor, an employer may not resort to self-help to recover debts owed to the employer by an employee from the wages then due to the employee.
I have not yet checked out the CA site, but presume this applies to EEs as well as NEs??
Thank you for this detail.
I think you're right that it would apply to exempt and nonexempt employees. Maybe someone can confirm that. You can also check out the CA site at http://www.dir.ca.gov/dlse/FAQ_Vacation.htm.