When Can I Deduct from my Employee’s Paycheck? Part 2: Tools & Equipment

Now that you know where and when you can (and cannot) deduct from your employee’s wages for uniforms, we will turn to deductions for tools and equipment in this week’s installment of our Paycheck Deductions blog series.

The same federal law that applies to uniforms applies to work tools and equipment, so employers can require employees to pay for such items, either directly or through payroll deductions, only if the employee’s pay after deductions is at least equal to the minimum wage. As we saw with uniforms, however, state laws differ in their treatment of deductions for tools and equipment. Some states do not specifically allow or forbid deductions for tools and equipment, but as a general rule, required protective equipment or tools must be provided by employers. In all cases where tools and equipment deductions are permitted by applicable law, employers should obtain specific, voluntary, written consent from an employee, indicating the amount and timing of such deduction. Below are some additional state-specific laws and regulations regarding deductions for tools and equipment.

In Alaska, an employer and employee may enter into a written agreement allowing a deduction from wages as a security deposit to ensure that uniforms and equipment issued by the employer are returned in clean condition and good repair, as long as the total deposit does not exceed the cost of the item, and the deduction does not reduce the employee’s wage below the statutory minimum or reduce the employee’s overtime compensation below one and one-half times the contractual rate of pay.

California employers may not make wage deductions for required tools. Generally speaking, employers must provide such required equipment and tools. There are, however, exceptions to this general rule. If the employee makes more than twice the minimum wage, the employee could be required to provide and maintain hand tools that are customary to the craft/trade of their expertise. There are also exceptions for certain beauty salon and barber shop employees.

To prevent destruction or loss of company uniforms, tools, or equipment, California employers may require and provide a receipt for an onboarding security deposit that is equivalent to the cost to the employer for such items, in accordance with Sections 400-410 of the California Labor Code.

Before making wage deductions for items like equipment, Connecticut employers must first seek and obtain Labor Commissioner approval of the authorization form employees will sign for such deductions.

Delaware law does not specify whether employers can require an employee to purchase a uniform or equipment necessary for them to do their job. However, employers cannot deduct the costs from an employee’s wages, nor can they deduct the cost of unreturned items from an employee’s final paycheck.

Employers in Illinois may deduct from wages with the express written consent of the employee, given freely at the time the deduction is made, but they cannot withhold or deduct from wages pending the return of uniforms, tools, pagers, or any other employer owned equipment.

Although Iowa employers may generally withhold for purposes benefitting the employee when such employee provides written authorization, employers cannot deduct or withhold for lost or stolen property, unless the property is equipment specifically assigned to the employee, and the employee acknowledged receiving the equipment in writing.

In Kansas, pursuant to written authorization, employers may deduct or withhold from wages to recoup the replacement cost or unpaid balance of the cost of the employer’s merchandise or uniforms purchased by the employee. Kansas employers may also deduct from an employee’s final wages to recover the employer’s property provided to the employee in the course of the employer’s business including, but not limited to, tools of the trade or profession and personal safety equipment, until such time as such property is returned to the employer. Upon return of the employer’s property, the employer must pay the withheld wages to the employee. Employers may also withhold or deduct form final wages to recover the replacement cost or unpaid balance of the cost of the employer’s merchandise, uniforms, company property, equipment, tools of the trade, or other materials intentionally purchased by the employee.

Louisiana employers may not withhold or deduct from an employee’s wages unless the employee willfully or negligently damages goods or works, the employee willfully or negligently damages or breaks the employer’s property, or the employee is convicted or pleads guilty to theft of the employer’s funds. Louisiana law does not prohibit an employer from requiring an employee to purchase a uniform, tools, or other items necessary for employment, but the cost cannot be deducted from wages unless conditions above are met.

Minnesota employers may make deductions from an employee’s wages for purchased or rented equipment used in employment, except tools of a trade, a motor vehicle, or any other equipment which may be used outside the employment, not to exceed $50.

Although Montana law doesn’t explicitly prohibit an employer from requiring an employee to purchase tools and equipment, it does largely prohibit deductions for items that benefit the employer, rather than employee. Accordingly, a conservative approach would be to provide necessary tools and equipment to employees in Montana.

New Hampshire employers may not require a deduction to offset payments intended for purchasing items required in the performance of the employee’s job in the ordinary course of the operation of the business, so no deductions should be made for required uniforms, tools, or equipment.

Deductions from wages may be made in North Carolina if both the employer and employee are aware of the amount and have agreed to it, and if the employee has given prior written consent, which is signed on or before the payday from which the deduction is to be made, indicates the reason for the deduction, and states the dollar amount or percentage that will be deducted. If the employee does not know the amount of the deduction and has not agreed to it in advance, employers must obtain written authorization, which is signed on or before the payday from which the deduction is to be made and indicates the reasons for the deduction, and give written notice of the actual amount deducted and the employee’s right to withdraw consent.

Pennsylvania law does not specifically address whether an employer may deduct or withhold wages from an employee’s pay check to pay for required uniforms and tools, but such deductions are not advisable as they are not listed as permissible under Pennsylvania Admin. Code 34:9.1, and they do not primarily benefit the employee.

In South Carolina, employers must provide employees with prior written notice of deductions or withholdings, either at time of hire, or at least seven days before the withholding or deduction.

In order to deduct from Wyoming employees’ wages for tools, equipment, uniforms, or other required items, the employee must actually possess the item(s) and sign a written acknowledgement that the employee purchased and received the item(s).

Employers in Indiana, Kentucky, Maine, New Jersey, New York, Oregon, Rhode Island, and Washington may not make wage deductions for required uniforms, tools, or other necessary items. Other states either fail to explicitly address deductions for tools and equipment or simply require that employers obtain specific, voluntary, written consent from an employee, indicating the amount and timing of a deduction for tools and equipment, prior to making such a wage deduction. Even where allowed, deductions for tools and equipment should not bring an employee’s pay below the applicable minimum wage.

This blog article is intended for general informational purposes only and should not be construed as legal advice or opinion. Each real life wage deduction scenario presents unique facts, which should be analyzed together with your legal counsel. Contact myHRcounsel with questions concerning specific facts and circumstances.