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Tina
Tina, Lawyer
Category: Legal
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Experience:  JD, BBA Over 25 years legal and business experience.
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I am an Illinois employer who is struggling with payroll deductions

Resolved Question:

I am an Illinois employer who is struggling with payroll deductions with my employees. I have several employees who have company credit cards and who are also in positions to make purchases on behalf of the company. The company policy dictates that any purchases must have the original credit card receipts turned in with the job number and the reason for purchase. This rarely happens and I have an employee/employer contract that every employee signs that stipulates if they policy is not followed that I can hold the amount until the charges have been verified. Is this legal?
Submitted: 3 years ago.
Category: Legal
Expert:  Tina replied 3 years ago.

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Customer: replied 3 years ago.
yes
Expert:  Tina replied 3 years ago.
Thank you.

As long as you have the employees written consent, then it is typically legal to enforce this policy. However, such deductions should not reduce the employees wages to less than the state minimum wage and the consent must be freely given by the employee at the time the deduction is made, so the previously signed stipulations are not likely to be enough.

Unfortunately, such a practice can invite an investigation by the state DOL if an employee complains to them. To avoid this, some employers require employees to use their own credit cards and submit expense reports or resort to some other form of discipline (written warnings typically) instead of wage withholding.

Best regards,

Tina

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Customer: replied 3 years ago.
I understand what you are saying, however, our situation is a little different. The written consent is freely given as part of their employment contract and serves as a "blanket" rule for any subsequent unauthorized charges. Also, the employee gets the amount held posted back once the charge has been verified. It's not that we are keeping the money in question, we are using the withholding as a tool to get them to comply with the company policy. From your answer, it looked as if I need to get them to comply with each missing receipt. Did I understand that correctly?

Shaun
Expert:  Tina replied 3 years ago.
Hello again Shaun.

If you were investigated by the DOL, it would be best to have a signed agreement by the employees for each pay period in which there were deductions made since these deductions, unlike insurance benefits, are not for the benefit of the employee.

If you do not have them sign a new form each time, the DOL could find that the earlier stipulation is inadequate and assess fines against you. They COULD do that, but probably wouldn't.

Ultimately, if you pay the withheld amount, it should not be a problem.

Good luck and take care.
Tina, Lawyer
Category: Legal
Satisfied Customers: 31984
Experience: JD, BBA Over 25 years legal and business experience.
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