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Joseph, Lawyer
Category: California Employment Law
Satisfied Customers: 5299
Experience:  Extensive experience representing employees and management
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making deductions from employees current wages due to an over

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making deductions from employees current wages due to an over payment in wages. Can an employer deduct from an employees bank account overpayments without agreement from the employee. the employee signed up for direct deposit ...does this direct deposit authorization form which allows for deposit corrections allow for such a deduction from wages
Hello and welcome to JustAnswer.

I'm sorry to hear about your situation and hope I can help.

What type of overpayment was made? Was it a 'double' payment or an error in calculating?

Have you also considered just deducting the overpayment from future wages paid to the employees?
Customer: replied 4 years ago.

It was a wage overpayment deposited into the account of the employee. We are looking at deducting the payment BUT the question is if we can just deduct the amount.


In my past encounters with legal counsel on this issue it has always been noted that in order to deduct money from an employee we need authorization to reduce current wages. The overpayment is done ( duplicate pay) and now we want to recoupe the amount back from the employee. We have also been advise ( or I have) that we cannot take them below the state min wage for current work performed as well.


I need to know is the direct deposit form a sound document that allow us to deduct from wages. I dont believe so at this point and we still would need to find out if the employee even has enough there. The basic question is whether we can reduce current wages with a deduction without authorization.

If the overpayment was a duplicate of current wages, you don't need the employee's authorization prior to deducting the amount from his or her bank account.

This is due to the fact that the overpayment doesn't constitute wages that have been earned by the employee, since they were only made due to an accounting error.

Therefore, they don't fit into the Labor Code Section 221 prohibition on an employer requiring an employee to repay wages:"It shall be unlawful for any employer to collect or receive from an employee any part of wages theretofore paid by said employer to said employee."

However, you should still notify the employee of the error prior to deducting the amount.
Customer: replied 4 years ago.

Hello .. it is not a duplicate of current wages it is a duplicate of past wages paid. What are the rules around this for past wages not current wages it is clerical error but my question is around the deduction of wages ..


also can you set an employee below min wage by doing so and violate min wage payment rules.



I'm not clear what you mean by it being a duplicate of past wages paid. Was there a duplicate payment for past wages? When did it occur?

If you are making the deduction from wages, it would be illegal to pay the employee less than minimum wage for current work, even if you're doing so in order to recoup the overpayment that was made.
Please remember to rate my answer positively so I get credit for my work!

Thanks and best of luck!
Joseph and other California Employment Law Specialists are ready to help you
Customer: replied 4 years ago.


Thanks again Joseph ... yes past wages were paid twice ... wages were paid in March 2012 by cutting two checks ... one was supposed to be stopped and it wasnt and the employee cashed them both.



My answer above is the same. If you're going to make deductions from the wages, you should do so only down to minimum wage and no lower.
Joseph and other California Employment Law Specialists are ready to help you