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Permissible Deductions

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Employment Law 101

  • Format: Self-paced
  • Course Duration: 3 hrs 11 mins
  • SHRM Professional Development Credits: 3.0
  • HRCI General Recertification Credits: 3.25
  • Certificate of Completion (after passing quiz)

Lawsuits and legal actions are on the rise. We regularly hear about employers leaving themselves liable and open to employee issues related to noncompliance of a regulation. In today’s business environment, every HR Professional must learn the basics of employment law to legally hire, evaluate and manage employees. In this course, Mark Addington, Esq. will discuss a number of different laws that impact the people relationships in the workplace. During this course, the student will learn:

  • The difference between an employee and independent contractor
  • Effective hiring, evaluation and termination procedures
  • An overview of employee benefits
  • Methods to resolve employment disputes
  • Discrimination and union laws
  • Workplace safety rules
  • Effective communication techniques, negotiation strategies and legal tests for court proceedings

Students will also gain an inside view of the law with case examples, real situations and prevention strategies to effectively resolve workplace issues. The overall goal is to provide you, the HR Pro, with an overview of important laws, help you deal with compliance issues and how they relate to many of the HR functions. Support your organization’s success by being compliant and keeping you, your managers and senior leaders, out of legal trouble. Please note: Course originally recorded in 2015 with a focus on employment law in the United States. Laws may have changed since the original recording. Always consult an attorney when it comes to making employment law decisions.

NOTE: There are new regulations starting January 1st, 2020 that increase the threshold in the salary test. Always consult an attorney as regulations discussed in this course can change.

HR Jetpack is recognized by SHRM to offer Professional Development Credits (PDCs) for SHRM-CP or SHRM-SCP. This program is valid for 3.0 PDCs for the SHRM-CP or SHRM-SCP. For more information about certification or recertification, please visit

This activity, has been approved for 3.25 HR (General) recertification credit hours toward aPHR™, PHR®, PHRca®, SPHR®, GPHR®, PHRi™ and SPHRi™ recertification through HR Certification Institute® (HRCI®). For more information about certification or recertification, please visit the HR Certification Institute website at
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Title: Permissible Deductions
Module: Wages
Duration: 3:40

Now we're going to talk about permissible deductions from wages. This is an area that has, you know, some big questions, in terms of where the liability is. But I wanna caution you, it's an area that has a lot of variables. For instance, under federal law, the Fair Labor Standards Act generally deals with wages and it basically says that you can take deductions from wages for things like property damage or cash shortage or use of tools or required uniforms, but those deductions can't bring the wages that are being paid in a given work week below the minimum wage. And that is pretty straightforward, you can't under federal law.

The challenge is that all of the different states have chimed in as well, and all of them vary in terms of how they handle permissible wage deductions. So while you may have no issues under federal law, wherever your jurisdiction is, wherever you are dealing with the situation, you're going to have to check that state law to make sure it's permitted.

I'll give you a couple of examples. California. California is basically of the mind that you have to get prior written authorization from the employee and it's only for withholding certain specific items that are defined within the statute, within the law. So it narrows the list of when it's permissible and then it requires the employer to get the employee's written authorization before deductions are taken.

So for instance, if you had the cost of certain tools that were furnished by the employer and then taken away and you wanted to deduct that from the final paycheck, you couldn't do so unless you had a writing that stated the value of the tools that the employee had and the employee agreed to allow that type of deduction. So that's an example.

Another one might be New York. In New York, they have a rule that basically says that you can only make deductions if it's for the benefit of the employee. So it's like you loaned the employee money, and you're recouping that, well it was originally for the benefit of the employee, it wasn't to recover a business expense. It has to be either permitted by the law or you have to get written authorization so there's more flexibility. A written authorization is not required, unless it's permitted already by the law. And even with authorization, the deductions have a ceiling In that you can't deduct more than 10% of the gross wages for any particular pay period.

So, California and New York are two major states that I selected to be illustrative of the variables when you're dealing with deductions. And all of those variables are products of state law. The long and short of it is, you have to know what the rules are that apply, and the rules aren't going to be a consistent federal rule in this case. It's going to be state law that seeks to protect the employees from potential inappropriate or unjust deductions.

Instructor: Mark Addington

Mark A. Addington, Esq. advises and advocates on behalf of businesses concerning Labor & Employment Law, Business Regulatory Compliance, Restrictive Covenants (Non-Competition, Non-Solicitation, and Confidentiality), Wage & Hour, Privacy, Technology, Business Contracts, and Mediation.

He represents and counsels businesses exclusively in all types of employment matters involving discrimination law, disability law, employment contracts and separation agreements,...

Mark's Full Bio

SHRM Recertification

HR Jetpack® is an official SHRM Education Partner recognized by SHRM to offer Professional Development Credits (PDCs) for SHRM-CP or SHRM-SCP.

HRCI Recertification

HR Jetpack® is recognized by HRCI as an approved provider to offer credit hours towards aPHR™, PHR®, PHRca®, SPHR®, GPHR®, PHRi™ and SPHRi™ recertification.

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The information provided on this site, and in all courses should be used as a guide. Always consult an attorney when making employment law decisions.

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