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Which paycheck deductions are legal?

On Behalf of | Jun 5, 2024 | Wage & Hour Laws |

Paycheck deductions are amounts taken from an employee’s earnings. Employers can make deductions for taxes, social security and other mandatory contributions.

However, as some paycheck deductions are illegal, it is important to understand the differences.

Legal paycheck deductions

In Florida, legal paycheck deductions include federal and state tax withholdings, social security and Medicare. Employers can also deduct for health insurance premiums, retirement contributions and other benefits if the employee agrees. These deductions must be clearly outlined and agreed upon by both parties.

Illegal paycheck deductions

Employers cannot deduct money from employees’ paychecks for business expenses or issues. Examples include tools, cash register shortages, broken equipment or equipment necessary for the job. These costs are part of business and do not come from an employee’s pay.

Wage and hour laws

Florida follows the Fair Labor Standards Act (FLSA) for wage and hour laws. Florida’s current minimum wage is $12.00 per hour. On September 30th, 2024, Florida’s minimum wage is scheduled to increase to $13.00 per hour.

Tipped employees must receive a cash wage of at least $8.98 per hour, including tips. Employers must ensure that certain deductions do not reduce the eligible employee’s earnings below these amounts.

Employee and employer practices

Employees have the right to understand their paycheck deductions. Employers must provide a detailed pay stub showing all deductions.

Employers must keep accurate records of all earnings and deductions. Doing this will help provide proof should an employee have questions or an issue is escalated.

Employers should also communicate clearly with employees about any deductions. Regularly reviewing payroll practices can help avoid mistakes and ensure compliance with the law.

Employees can protect their earnings by staying informed and following regulations, and employers can maintain fair and legal payroll practices.