Lawful and Unlawful Payroll Deductions. Presented by: Angelita E. Fisher King k Ballow. August 6, 2015

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1 Lawful and Unlawful Payroll Deductions August 6, 2015 Presented by: Angelita E. Fisher King k Ballow Tennessee Office: 315 Union Street Suite 1100 Nashville, Tennessee Office: (615) Fax: (888) California Office: 6540 Lusk Boulevard Suite 250 San Diego, California Office: (858) Fax: (858) These materials, discussion and comments have been abridged from laws, court decisions, and administrative rulings and should not be construed as legal advice on specific situations or subjects.

2 Exemptions Executive Administrative Professional Computer Outside Sales Highly Compensated

3 General Issues Exempt Employees No Deductions Unless Specified by Law No Partial Day Deductions Non-Exempt Employees No Reductions Below Minimum Wage $7.25 Federal Check State Laws

4 Acceptable Leave Banks Insurance Premiums Taxes Garnishments/Court Orders Federal and State Laws Payments to Employee s Assignees

5 Rest Periods Exempt Do Not Deduct Non-Exempt Up to 20 Minutes Must be Paid Nursing Mothers Exempt Employees Not Eligible Non-Exempt No Pay Requirement Unless Employers Already Provide Compensated Breaks Check State Laws

6 Meal Periods Exempt May Not Deduct American Payroll American Payroll Tennessee Statewide Franklin, Embassy Tennessee Suites Non-Exempt May Deduct for a Bona Fide Lunch Employee Must be Completely Relieved from Duty Do Not Automatically Deduct

7 Shortages Exempt During Employment May Not Deduct At the End of Employment Same as Non-Exempt Employee Non-Exempt May Deduct Do Not Deduct Below Minimum Wage Theft Situations May be Different Check State Laws

8 Debts to Employers Exempt May Deduct Check State Law May Need Written Authorization Non-Exempt May Deduct Do Not Deduct Below Minimum Wage Wage Advances & Bona Fide Loans are Different Check State Law May Need Written Authorization

9 Unearned Vacation Exempt During Employment Do Not Deduct At the end of employment - May Deduct Check State Law Non-Exempt May Deduct Not Below Minimum Wage At the End of Employment May Reduce Lower than Minimum Wage Check State law

10 Cost of Training Exempt During Employment Do Not Deduct After Employment May Deduct Not Below Minimum Wage Non-Exempt May Deduct Not Below Minimum Wage Check State Law

11 Uniforms What is a Uniform? Exempt Do Not Deduct Non-Exempt May Deduct Not Below Minimum Wage Cannot Cut Into Overtime Compensation Check State Law

12 Absences Because of Sickness Exempt Leave Plan Yes No Leave Plan No Non-Exempt - May Deduct Leave Plan Yes No Leave Plan - Yes

13 Personal Absences Exempt May Deduct One or More Full Days Non-Exempt May Deduct

14 Inclement Weather Exempt Closed Business (less than one-week) Do Not Deduct Open Business (cannot come to work) May Deduct Non-Exempt May Deduct

15 Disciplinary Deductions Exempt Safety & Work Rules Penalties Do Not Deduct Suspension Yes - One or More Full Days Non-Exempt May Deduct Penalties - Do Not Deduct Below Minimum Wage Suspension - May Deduct

16 Partial First & Last Weeks Exempt May Deduct Non-Exempt May Deduct

17 FMLA Leave Exempt May Deduct Full Weeks Paid Leave Bank Intermittent or Reduced Schedule Convert to Hourly Non-Exempt May Deduct

18 Jury/Witness Duty Exempt May Not Deduct Non-Exempt Check State Law May Deduct Amount Paid by Court

19 Effect of Improper Deduction Loss of Exemption May Collect Past Overtime

20 Safe-Harbor Policy Policy: Handbook, at Hire, Intranet, etc. Reporting Procedure Reimburse Employee Good-Faith Commitment to Comply in Future

21 Questions k Answers

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