Is It Legal to Deduct Benefits from Final Paycheck?

[DrPeach]

What is the name of your state (only U.S. law)? Texas

My company has a wellness program that reimburses for such services as health club membership, exercise classes, exercise equipment, massage, etc. My company also provided some medical benefits, such as yearly flu vaccination and tetanus shots. The company downsized and I was laid off, and all the wellness and medical benefits were deducted from my final paycheck. Is this legal? I have copies of the employee handbook and benefits guide, but these only describe the benefits and don't make any mention of how they are to be closed out at termination.

 

[jsmith416]

Were you covered by those benefits during the final pay period?

 

[b.inbox@hotmail]

If you received those benefits then yes indeed they can.

 

[cbg]

Many people assume automatically that benefit premiums run forward; that is to say, that premiums deducted on December 1 cover December 1-15, or whatever dates. But that is not always (or even mostly) the case. At the last three employers I have worked for, as well as the one my husband works for, premiums deducted on December 1 would cover November 15-30. Also, quite often benefits continue for a short period after the last day of employment.

So yes, it is legal to deduct benefits form the final paycheck.

 

[TinkerBelleLuvr]

Are these benefits that you normally would have had a deduction for?

For example, your employer gives you $150 towards a gym membership. They make no deduction from your check - it's a case of show the receipt and they give you the $$. In this case, is it correct that they would deduct from your final check a portion of a year's worth of $150 with no prior notice?

The same with the flu or tetanus shot? Were these normally free of cost to the OP?

I thought they can only deduct that which you sign for, or federal/state taxes and garnishments.

 

[DrPeach]

Let me clarify how the wellness program and medical benefits worked.

While I was employed, the company did NOT deduct from my paycheck for these benefits. In the case of the wellness program, the company would reimburse employees up to $500 per year for health club membership, etc. In my case, I signed up for a health club membership for $175, submitted my receipt to HR and was reimbursed the full amount. For flu and other shots, the company contracted to a local vaccination clinic to come by the office and give the shots to anyone who signed up for them, at no charge to employees. (Family members could also get shots for a nominal fee.)

My final paycheck had deductions of $175 for the wellness program and $100 for the shots. I worked the full fiscal year during which these benefits were offered, so it's not a matter of pro-rating the expense.

 

[ecmst12]

Does the program document say anything about having to repay the reimbursement if you leave the company before X months after receiving the payment?

 

[DrPeach]

Does the program document say anything about having to repay the reimbursement if you leave the company before X months after receiving the payment?

I went over the Employee Handbook and Benefits Program documents with a fine tooth comb, and neither mentions reimbursement of these benefits. I asked HR to provide documentation of the company's policy and they've been dragging their feet for two weeks.

I guess what I'm asking is whether it's legal for the company to deduct these benefits if they have no written policy, which I suspect is the case.

 

[pattytx]

And what we're saying is it depends on the company policy AND if you agreed to the deduction in writing

Sec. 61.018. DEDUCTION FROM WAGES. An employer may not withhold or divert any part of an employee's wages unless the employer:

(1) is ordered to do so by a court of competent jurisdiction;

(2) is authorized to do so by state or federal law; or

(3) has written authorization from the employee to deduct part of the wages for a lawful purpose.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

http://www.statutes.legis.state.tx.us/Docs/LA/htm/LA.61.htm

 

[DrPeach]

And what we're saying is it depends on the company policy AND if you agreed to the deduction in writing

Thanks, I think that's exactly the information that I need. The only thing I signed regarding benefits was acknowledgment and acceptance of the contents of the Employee Handbook. Since the Employee Handbook makes no mention of repayment of these benefits at termination, it looks like I have grounds to sue the company for withholding them from my final paycheck.