Wage Claims

questions & answers

Question: is it legal for my boss to deduct my pay due to mistakes made by his employees on jobs we recently have been doing, and has he broke the law and which law?

Answer:

Withholding of wages

No employer may withhold or divert any portion of an employee's wages unless:
1. The employer is required to do so by state or federal law.
2. The employer has prior written authorization from the employee:An employer shall not withhold wages under a written authorization from the employee beyond their consent, unless the withholding is to resolve a debt ,obligation to the employer or court orders otherwise.

3. There is a reasonable good faith dispute as to the amount of wages due, including the amount of any counterclaim or any claim of debt, reimbursement, recoupment or set-off asserted by the employer against the employee. A.R.S. 23-352.
http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/23/00352.htm&Title=23&DocType=ARS

Wages in Dispute

According Arizona law, an employer must pay an employee all wages due that are not in dispute, but may withhold the disputed amount, including the amount of any counterclaim or any claim of debt, reimbursement, and recoupment or set-off. A.R.S. 23-352.
http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/23/00353.htm&Title=23&DocType=ARS

Wage deduction with consent

An employer may deduct wages from an employee's paycheck only with written consent by the employee for the following:
• cash shortages
• breakage, damage, or loss of the employer's property
• dishonored or returned checks

In accordance with federal law, an employer may not make deductions from an employee’s paycheck, if it would cause the employee to earn less than federal minimum wage, including deductions for uniforms, tools, or other items necessary for employment with the employer. A.R.S. 23-352. http://www.dol.gov/compliance/topics/wages-minimum-wage.htm
http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/23/00352.htm&Title=23&DocType=ARS

Improper Wage deductions

Factors to consider when determining whether an employer has an actual practice of making improper deductions include, but are not limited to:
•The number of improper deductions,
    o particularly as compared to the number of employee infractions warranting deductions;
•The time period during which the employer made improper deductions
•The number and geographic location of both the employees whose salary was improperly reduced and the managers responsible
•Whether the employer has a clearly communicated policy permitting or prohibiting improper deductions.
      o If an “actual practice” is found, the exemption is lost during the time period of the deductions for employees in the same job classification working for the same managers responsible for the improper deductions. 
•Isolated or inadvertent improper deductions will not result in loss of the exemption if the employer reimburses the employee for the improper deductions.

http://www.dol.gov/whd/regs/compliance/fairpay/fs17g_salary.htm

Action by employee to recover wages

If an employer fails to pay wages due any employee, the employee may recover in a civil action against an employer or former employer an amount that is treble the amount of the unpaid wages. A.R.S. 23-355.
http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/23/00355.htm&Title=23&DocType=ARS

Penalty against employer

An employer who has been ordered by the department or a court to pay wages due an employee and who fails to do so within ten days of the order being finalized, is liable to pay the employee an amount which is equal to treble the amount of the unpaid wages and which shall be subject to interest at the legal rate. A.R.S. 23-360. http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/23/00360.htm&Title=23&DocType=ARS

Safe Harbor Rule: Employer
An employer will not be sanctioned if:
1.If an employer has a clearly communicated policy prohibiting improper deductions and including a complaint mechanism
2.Reimburses employees for any improper deductions, and
3.Makes a good faith commitment to comply in the future, the employer will not lose the exemption for any employees unless the employer willfully violates the policy by continuing the improper deductions after receiving employee complaints.
http://www.dol.gov/whd/regs/compliance/fairpay/fs17g_salary.htm