Employee deductions

[LdiJ]

Since when does the law allow for in kind payments in lieu of money for earned income?

The law does allow for that. There are all kinds of things that get added into W2s that were not cash income. Non accountable expenses are the most common area.

 

[PayrollHRGuy]

I have had in the past deductions for personal spending on a company card that were later deducted from an employee's wages OK'd by the DOL during an audit.

 

[justalayman]

It's not "in kind." They're not paying him in socks or whatever he charged, they're paying him in the money he spent on the card.

It would be in kind if the employer considered the purchases as payment since the employer would be paying the credit card bill and not the employee.


And the employee is not agreeing to such a method of payment either.

 

[justalayman]

I have had in the past deductions for personal spending on a company card that were later deducted from an employee's wages OK'd by the DOL during an audit.

Was this in Virginia?

 

[PayrollHRGuy]

Was this in Virginia?

No but it was the Feds.

 

[justalayman]

No but it was the Feds.

Fed law doesn’t overrule state law

 

[PayrollHRGuy]

Is there some VA law that doesn't allow employers to deduct what is essentially a pay advance?

 

[LdiJ]

Is there some VA law that doesn't allow employers to deduct what is essentially a pay advance?

You are right, that would essentially be a pay advance.

 

[justalayman]

From http://townhall.virginia.gov/L/GetFile.cfm?File=C:\TownHall\docroot\GuidanceDocs\181\GDoc_DOLI_5539_v1.pdf

A. No employer may withhold any part of an employee’s wages for non-payroll deduct without written and signed permission of the employee, except for deductions for payroll advances and wage overpayments. (§ 40.1-29©)


B. No employer can require an employee, except an executive employee, to enter into a contract or agreement (written, verbal, or implied) which requires the employee to forfeit his

wages, salaries, or commissions as a condition or continuance of employment. (§ 40.1- 29(D))








C. Blanket authorizations signed by an employee at the commencement of employment which allow such forfeitures will be considered per se a condition of employment, and are not allowed. Only a signed agreement that is truly voluntary, and is not a condition of employment, is allowed by § 40.1-29(D).






If you go to the site you will see the statement


the deduction is a onetime- only arrangement and not a condition of employment.


Is mentioned a lot. There are examples similar to the situstion at hand and they clearly state a. Deduction is not allowed under a blanket authorization but rewuires a specific agreement for a one time only deduction.

 

[PayrollHRGuy]

Since forfeiture is only mentioned in paragraph B I can only assume that it is the forfeitures mentioned in C.

A. Specifically allows for "deductions for payroll advances and wage overpayments" without written authorization.

 

[FlyingRon]

This would be if we were talking about an advance. It doesn't sound like the poster has that. He sounds like he's doing a punitive forfeiture for failing to fill out whatever paperwork he requires. He doesn't have any indication that the charges that were not substantiated to his satisfaction were the employee's personal charges and could be stretched into think that their charges were an advance on the salary.

 

[PayrollHRGuy]

The OP wrote: "3. The directions state that any unauthorized charges and/or any receipts not supplied will be deducted from his/her paycheck."

The unauthorized charges are certainly either an advance or theft (and yes I know theft can't be deducted).

The non-supplied receipts I'm a little shaky on myself but if the employer doesn't know what was purchased because there is no receipt then we go back to it being an advance for personal purchases.

 

[justalayman]

The OP wrote: "3. The directions state that any unauthorized charges and/or any receipts not supplied will be deducted from his/her paycheck."

The unauthorized charges are certainly either an advance or theft (and yes I know theft can't be deducted).

The non-supplied receipts I'm a little shaky on myself but if the employer doesn't know what was purchased because there is no receipt then we go back to it being an advance for personal purchases.

You guess they are employee purchases. You have no way of knowing thst.


Did you miss the part about criminal charges for illegally withholding pay?

And there is no way to construe this to be a payroll advance. It would have to be given to the employee with that intent and that is not anything close to what has happened. This is a matter of forfeiture based upon a blanket agreement. It simply cannot be twisted enough to make this a legal deduction without the employees express written permission.

If the employer wishes to make a new agreement that states use of the card for personal purchases will be considered an advance on wages they might be able to make future personal purchases fly regardimg deducting without express permission. Of course that would also allow the user of the card to use it as much as they want but hey, why not make things worse.


Also note that the op said absolutely nothing about the purchases being for personal use. It’s as simple as they were required to provide receipts and are apparently not doing so.

As it stands, the best answer to the actual question asked is; no you cannot.


And unauthorized purchases don’t have to be personal use or theft. It may simply be the user has not received permission to purchase company items for company use so it would be neither personal use nor theft.

But the op isn’t even asking about unauthorized purchases. They asked about situations where the employee failed to provide a receipt

 

[FlyingRon]

The unauthorized charges are certainly either an advance or theft (and yes I know theft can't be deducted).
.

Or they're perfectly legitimate charges that the person didn't get around to documenting to the poster's satisfaction.
Still given the situation described, there's a high chance that this is a punitive measure and not an advance of pay (or anything else thats to the employee benefit). As I stated, she'll have to find another way to get their employees to do their paperwork. Forfeiting pay to do so is not legal.

 

[not2cleverRed]

Or they're perfectly legitimate charges that the person didn't get around to documenting to the poster's satisfaction.
Still given the situation described, there's a high chance that this is a punitive measure and not an advance of pay (or anything else thats to the employee benefit). As I stated, she'll have to find another way to get their employees to do their paperwork. Forfeiting pay to do so is not legal.

I think the simplest way would be, rather than docking for a missing receipt, have a process for removing card privileges for those who cannot follow the paperwork rules. After all, if the issue is one of paperwork, not of whether the employee is using a company card for personal use, then address that issue.

OP would then have to weigh which is more important: prompt paperwork or the convenience of the employee having the card to expedite work. OP could even get creative an offer incentives for getting all the paperwork submitted properly early - carrots are better than sticks.

Of course, if an employee is using the company card for personal expenses and not reimbursing the company, the company should consider just firing them. There's less ambiguity in doing that.