We all have bills to pay, and we want to be able to rely on a steady and dependable paycheck. So, what happens if your employer withholds funds from your paycheck? Can an employer withhold pay in North Carolina? It can, but only under certain circumstances.
So, let’s dive into what is allowed and not allowed for wage deductions in North Carolina. And if you find that your employer has broken the rules, our experienced Winston-Salem and Charlotte employment attorneys at EMP Law can make it right. We have over 140 years of combined experience and a passion for protecting the workers of North Carolina.
For assistance, please call (336) 724-2828 or send us an online message today.
When Can Employers Withhold Pay?
An employer can withhold pay for the employer’s or the employee’s benefit. The rules for withholding change depending on whose benefit the withholding is for.
Withholding for the Employer’s Benefit
When it comes to the employer’s benefit, an employer can make deductions from your pay for many reasons, including:
- To cover inventory shortages,
- To make up for damage to employer property, and
- To cover cash shortages.
In general, an employer must receive prior authorization from the employee to make any of the above deductions.
An authorization must satisfy the following criteria:
- It must be in writing,
- It must state the reason for the deduction,
- It must state the deduction amount as a percentage of wages or in dollars, and
- It must be signed.
If the authorization states the deduction amount from the employee’s wages, the employee cannot withdraw the authorization, no matter when it happens.
The employer must give the employee written notice about the actual amount of the deduction at least seven days before the employer makes the deduction if an employer can’t state in an authorization the amount of wages to be deducted for a shortage in cash or inventory or damage to property because the amount is incalculable until the event occurs. This written notice must also let the employee know they can withdraw their authorization.
Withholding for the Employee’s Benefit
Deductions from your wages aren’t always about you losing money and could be about obtaining a benefit.
A deduction for the benefit of an employee could include a deduction to cover the following:
- Parking fees,
- Charitable contributions,
- Savings plans, and
- Uniforms the employer doesn’t require.
To make a deduction for the employee’s benefit, the employer must have written prior authorization from the employee with the same elements as an authorization required for a deduction made for the employer’s benefit. However, an employee can withdraw the authorization for a withholding that benefits them, regardless if the authorization stated the amount.
What Kind of Withholding Is Not Allowed?
Withholding for an employer’s benefit is not allowed unless authorized, and its purpose is to comply with state or federal law or to cover a cash shortage, property damage, or an inventory shortage. So, can an employer withhold wages for disciplinary action? Or can an employer withhold pay as punishment? Technically, an employer can punish an employee through a deduction, but only if the employee previously agreed to the deduction and it is for property damage or a shortage that we just mentioned.
When a deduction is made for its benefit, an employer cannot make a deduction that has the following effect on an employee’s wages:
- It reduces the employee’s wages to below minimum wage ($7.25 per hour); or
- It reduces the employee’s overtime wages to less than 1.5 times their regular pay rate.
These limits do not apply to deductions made for an employee’s benefit.
You can file a wage complaint with the North Carolina Department of Labor’s Wage and Hour Bureau (Bureau) if your employer makes a deduction that is against the law.
To submit your complaint, you must provide the following information to the Bureau:
- Your name and contact information,
- Your date of birth,
- Your employer’s name and contact information,
- The nature of your employer’s business,
- Your rate of pay,
- The dates of your employment,
- The dates you should have been paid, and
- The amount owed.
Ensuring that the Bureau has the proper information about your employer and that your employer is held accountable for all wage violations it committed can be a complex undertaking. You may have to dig through piles of wage statements and employment agreements to accurately calculate what you are owed. But remember that you don’t have to do this on your own. Our skilled North Carolina employment attorneys can handle the matter for you and ensure you recoup every cent you were wrongfully denied.
EMP Law Can Put Money Back in Your Pocket
No one should be taking money from you without your permission—not even the employer that pays you. If your employer has had its hands in your pockets without authorization, we can get your money back. EMP Law has an award-winning employment law team with over a century of combined experience. We have a rich history of success and are ready to fight for you. Please contact us online or give us a call at (336) 724-2828 today to schedule a consultation.
Michael provides compassionate, diligent, and creative legal services that are tailored to meet each client’s specific needs. His experience relating to clients from diverse backgrounds makes him well suited for representing his clients across a broad range of legal areas. He practices in the areas of employment law and family law, and is experienced in criminal law.
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