Please note this blog post is written for employers, although we understand it may be of interest to employees as well. At this time, our firm only represents business owners and employers. If you need assistance with a legal matter as an employee, please consult a firm that represents employees.
It can be very frustrating when your employee makes a costly mistake. You may be wondering, is it legal to dock pay for mistakes?
This is an important question to ask before taking any action. Each state is different and there are several things to take into consideration in Florida.
Is It Legal to Dock Pay for Mistakes in Florida?
The State of Florida does not have specific laws pertaining to deductions to employee pay to compensate for mistakes made on the job.
Some states require that the employee provide written consent to the deduction. Without a law prohibiting docking pay for mistakes, a Florida employer can withhold or reduce wages for mistakes or loss of equipment. Some common examples include:
- Damage or loss of the employer’s property;
- Cash shortages;
- Returned checks; and
- Uniforms or tools.
Under the Fair Labor Standards Act (FLSA), as long as the employee’s wage does not drop below the minimum wage, these deductions may be permissible, depending on the type of employee.
Exempt vs Non-Exempt Employees
Non-exempt employees are hourly employees, which means they are entitled to overtime pay when work exceeds 40 hours per week. Exempt employees do not receive overtime and are generally salaried employees.
Non-Exempt Employee Wage Reduction for Mistakes
The FLSA does not prohibit the reduction of the hourly wage for non-exempt workers as a disciplinary measure. However, this reduction cannot drop the employee’s wage below minimum wage.
If the employee has an employment agreement or union contract that asserts contrary terms regarding wage deduction protocol, that should be followed, providing it is not illegal.
Exempt Employee Wage Reduction for Mistakes
Salary deduction for exempt employee mistakes is permissible by the FLSA under certain circumstances including:
- The violation of safety rules of major significance; and
- Disciplinary suspensions of one or more full days imposed for infractions of workplace rules of conduct.
Deductions for damage to property, equipment reimbursement, accounting errors and the like are not permissible. They would defeat exemption status because it would reduce the guaranteed salary.
Other non-disciplinary reasons for exempt employee wage deductions may include:
- When an employee takes personal leave for more than a day;
- To offset compensation the employee received from jury duty, witness fee, or military pay when not working;
- Family and Medical Leave Act unpaid leave; and
- During the first or last week of employment when the employee doesn’t work the full week.
As an employer, it is important to understand when you can dock pay for mistakes and for employees who are not working for certain reasons.
Employee Misappropriation of Funds
There are some exceptions to the minimum wage rule. One situation is if the employee misappropriates the employer’s funds, uses them, and does not return them.
This may be considered theft, but in some circumstances, it may also be accidental or negligent. Regardless of the situation, the employee was essentially paid these funds regardless if they were used.
If the employee did commit theft, depending on the sum of the funds or property, the employer may want to consider pursuing legal action.
Employer Penalties for Improperly Docking Pay
Penalties differ depending on if the employee is exempt or non-exempt. If an employer reduces the paycheck of an exempt employee, the employee is being treated as if he or she is a non-exempt employee.
Because of the deduction, the law may interpret the exempt employee as non-exempt, which means they are entitled to overtime pay.
A court would take into consideration the number of improper deductions and how far apart they were. The location and number of managers overseeing the employee will be considered along with the clarity of company policy on deductions.
Talk to Florida Employment Law Attorney to Reduce Legal Risk
As an employer, you already have plenty of work to do without worrying about the legal ramifications of disciplining your employees.
Employment law can quickly become confusing and it is important to have an experienced business law attorney who can answer your questions and help you determine what is best for your business.
The experienced attorneys, paralegals, and administrative professionals at Brewer Long understand your frustration and strive to provide a client-focused experience where you are able to receive all the answers you need to remain compliant and in line with industry standards.
Our legal team does much more than litigate. We are here to support your legal business needs through consultations and guidance as we navigate the legal system on your behalf. Contact Brewer Long to schedule a consultation with one of our attorneys.
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