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 including deductions and minimum wage laws.