Knowing Your Rights as an Employee: 5 Most Common Pay Deduction Violations

As an employee, it’s important to make sure your employer pays correctly.  Depending on the type of business, or other arrangements you’ve made with your employer, there may be other deductions taken out. There are certain items you can’t deduct though, and other mistakes can result in employees being paid less than what they should be. We’ll cover the biggest pay deduction violations here.

Not Paying For Overtime

All employees have a right to receive overtime pay for time worked over 40 hours unless the Fair Labor Standards Act classifies them as exempt. Exempt employees include:

● retail or customer service employees paid on commission,

● commission-based salespeople who sell cars, trucks, trailers, farm equipment, boats, or aircraft and are employed by non-manufacturing companies to sell these items to customers;

● parts clerks and mechanics in the above-mentioned industries who are employed by retail companies to service those items for customers.

● people who work for railroads or air carriers.

● cab drivers

● certain employees of companies that transport people or property.

● seamen on American craft

● local delivery employees paid on trip rate plans

● some employees of non-metropolitan tv and radio stations.

● in-home domestic service workers

● employees of movie theaters

● farmworkers

Classifying Employees Incorrectly

Employees are entitled to certain benefits, such as worker’s compensation, payroll taxes being paid by their employer, and unemployment insurance. Independent contractors don’t get these benefits. Ask if you’re considered an employee or an independent contractor. If you’re an employee, ask what deductions should be coming out of your paycheck.

Minimum Wage Infractions

Federal, state, and some city laws establish certain minimum rates of pay. You’re entitled to receive the highest rate from those three. If an employee isn’t receiving the minimum wage, they need to see if it’s listed on their paycheck and find out their city or state’s minimum wage. If they don’t think they’re getting paid enough, they can contact us at to find out more.

Working Outside Scheduled Hours

Work starts when an employee arrives and ends when they leave. This includes the time it takes to put on and take off any protective gear. If you’re ever asked to start work before your scheduled time, or work through a break without additional pay, refuse.

Unlawful Pay Deductions

Deductions from pay should never result in employees getting paid less than minimum wage for the number of hours they work. The only legal pay deductions are:

● employee authorized deductions

● income tax withholding

● deductions authorized through a contract, such as union dues.

● court-authorized deductions, such as wage garnishments

● deductions the employee asks for, such as payments for an employer loan

Make sure your employer lists all these deductions on your paycheck stub so you know everything is accounted for.

No one likes being shorted on their paycheck. When you’re hired at a new company, make sure they’re not making any of these mistakes with your pay. Employees are entitled to fair pay, and knowingly or unknowingly violating employment laws regarding pay can get employers in serious trouble. If you think the employer might have made a mistake, ask another member of the management team, or an outside accountant, to look at the paycheck to make sure everything is calculated correctly. If it isn’t, find out what needs to be done to change it.

Leave a Reply

Your email address will not be published.