Pay Deductions Quiz: Uniforms for a minimum wage employee. You hire a minimum wage employee to work as a cashier at your auto parts store. The employee signs an agreement to have $20.00 deducted from her first check to cover the cost of a uniform. You then, as agreed upon, deduct $20.00 from the employee's first check to cover the cost of the uniform. Have you violated any Fair Labor Standards Act (FLSA) requirements? Here, you have violated the FLSA's requirement that a nonexempt employee be paid the minimum wage for each hour worked. It makes no difference that the employee agreed to the deduction. Because the employee is a minimum wage employee, there was nothing that could legally be deducted from the employee's wage to cover the cost of the uniform. Any deduction puts the employee below the minimum wage level.   Feel free to visit the main page we’ve created for Articles on Payroll Services. Modern Business Associates frequently deals with payroll issues. As a Profession ...

Pay Deductions Quiz: Hourly employee drops the computer! Can you get them to pay up? Your new hourly front desk staff employee is paid $1.00 per hour in excess of the required minimum wage and works 40 hours in the workweek. The employee drops his laptop and breaks a piece off. Your existing policies require employee responsibility, so you deduct $50.00 from the employee's weekly paycheck. Have you violated any Fair Labor Standards Act (FLSA) requirements? Yes. Under the FLSA, the employer could theoretically deduct up to $40.00 to cover some of the loss because the employee has earned $40.00 in excess of the required minimum wage during the workweek. However, once the employer has deducted any earnings in excess of the minimum wage, no further deduction can be made without violating the FLSA. Modern Business Associates frequently deals with payroll issues. As a Professional Employee Organization, our clients rely on us to help them effectively deal with these kinds of topics includi ...

Pay Deduction Quiz: Aprons for the hardworking cook.

A cook earns $10.00 per hour and works 45 hours in the workweek. Therefore the cook will have wages of $400.00 in regular pay and $75.00 in overtime pay. The employer reasons that the cook earns well above minimum wage and decides to deduct $5.00 from the cook's weekly paycheck for a replacement apron and hat although the cook has not agreed in advance to the deduction.

Have you violated any FLSA requirements?

Probably. Note that the deductions may not cut into any pay for overtime hours. Deductions made during weeks when overtime is worked will be particularly scrutinized to ensure that the employer is not attempting to evade the overtime requirements of the FLSA.

Modern Business Associates frequently deals with payroll issues. As a Professional Employee Organization, our clients rely on us to help them effectively deal with these kinds of topics including deductions and minimum wage issues.

Pay Deductions Quiz: Uniforms for a minimum wage employee. You hire a minimum wage employee to work as a cashier at your auto parts store. The employee signs an agreement to have $20.00 deducted from her first check to cover the cost of a uniform. You then, as agreed upon, deduct $20.00 from the employee's first check to cover the cost of the uniform. Have you violated any Fair Labor Standards Act (FLSA) requirements? Here, you have violated the FLSA's requirement that a nonexempt employee be paid the minimum wage for each hour worked. It makes no difference that the employee agreed to the deduction. Because the employee is a minimum wage employee, there was nothing that could legally be deducted from the employee's wage to cover the cost of the uniform. Any deduction puts the employee below the minimum wage level. Modern Business Associates frequently deals with payroll issues. As a Professional Employee Organization, our clients rely on us to help them effectively deal with these kinds ...

Tax credits mean good news for employers!    On March 18, 2010 President Obama signed into law the Hiring Incentives to Restore Employment Act (HIRE Act).  The HIRE Act carries two significant tax incentive components for employers:  a Social Security tax forgiveness and a retention tax credit.  The first starts immediately for employers hiring qualified employees through the remainder of 2010 and the second can be earned by employers who retain qualified employees for a minimum of 52 consecutive weeks.  The following is an overview of how both incentives work.   Social Security Tax Forgiveness: Employers will receive a 6.2% Employer Social Security Tax Exemption on wages paid to “qualified employees” after March 18, 2010 and before January 1, 2011, up to the Social Security maximum of $106,800.  The maximum credit per qualified employee is $6,621.  To be a qualified employee the new employee must: ·     &# ...