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Final Paycheck Deduction

Discussion in 'Termination: Firing & Resignation' started by CasadeGryffindor, Jun 30, 2021.

  1. CasadeGryffindor

    CasadeGryffindor Law Topic Starter New Member

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    Jurisdiction:
    North Carolina
    North Carolina, USA. I was terminated from my position. I was a salaried employee. Our work required us to travel by air. We would purchase airfare on our personal credit cards and submit expense reports for reimbursement. I purchased airfare prior to my termination as required for my work and was reimbursed for it. I was terminated before my work required me to complete this travel. The airfare was nonrefundable. Therefore, I have an unused ticket that Delta will not refund but give me a voucher for. My termination letter states that they are deducting the cost of the airfare from my last paycheck since the cost of the ticket is nonrefundable. I have not canceled the ticket yet and the departure date isn’t until July 2.

    What are my legal rights to fight this? Reading the NC labor laws it does not appear that this is legal as there was no written consent from me. Thank you.
     
  2. army judge

    army judge Super Moderator

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    Your numerous, vlounimous "rights" have little (if anything) to do with resolving your dilemma.


    What is the value of the nonrefundable airline ticket?

    If the employer withholds the value of the ticket from your final payment you are free to take the matter to a local, small claims court.

    Small Claims Courts are part of the North Carolina court system allowing people to settle disputes regarding property or money worth $10,000 or less.

    Every county in North Carolina has a Small Claims Court, which is sometimes called Magistrate's Court, the maximum amount you can sue for may be different in different counties.

    If the value of the ticket is less than (or or equal to) $10,000, you can avoid squabbling and allow a judge to decide who is right, as well as who is wrong.

    NOTICE: The court will issue you a judgment for example, $2,500 (the value of the ticket for which you remain unreimbursed).

    However, the court will NOT assist you in collecting the judgment.

    That, mate, will become your responsibility.

    You can use any internet search engine to see how others with such judgments fared in collecting their judgments!

    ===================================

    You can also file an unpaid wage claim with your NC DOL.

    NC DOL does NOT investigate wage complaints for less than $50.00.

    It can't hurt to try, because if the DOL takes up the matter for you, they'll make sure you get whatever money is owed to you.

    If your wage complaint deals with your last paycheck, you must wait three days after the payday in order to file a wage complaint with your NC DOL.

    This is where a person can file a wage claim on their OFFICIAL site:

    How to File a Wage Complaint | NC DOL


    In order for the N.C. Department of Labor’s Wage and Hour Bureau to assist an employee with a wage dispute, a complaint must be filed with this office. To file a wage complaint, you must contact our Call‐Center at 1‐800‐625‐2267 (1‐800‐NC‐LABOR). An Information Specialist will take the complaint information over the telephone and enter it into our computer data intake system. To better serve you, we ask that you have the following information available when you call:

    • Your name
    • Your address, phone number (if cell phone we need your cell phone carrier)
    • Your email address
    • Your date of birth
    • Your Job description or Title
    • Name of the Employer/Company where you work(ed)
    • Employer’s Physical address (i.e. business location) (cannot accept P.O. Boxes)
    • Employer’s contact information such as: phone number, email, or fax
    • First and last name of the contact person we need to speak with in regards to your wages (i.e. owner, manager or supervisor)
    • Business Nature (i.e. law office, home health care, restaurant, etc.)
    • Rate of Pay (i.e. $7.25 per hour, 25% commission)
    • Total amount you claim is owed to you by your employer
    • Dates worked, but not compensated
    • The date of your first missed pay check
    • Beginning date of employment
    • Ending date of employment

    An employee may also take legal action on their own, including small claims court if applicable, without first having to file a wage complaint with this office. However, an employee cannot come back to us to file a wage claim if they take their own legal action in court regardless of the outcome. If an employee files a wage complaint with us and we cannot resolve their complaint, they are still free to take their own legal action.
     
  3. army judge

    army judge Super Moderator

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    One more once from the authorities that administer your NC DOL:

    (MY NOTE: Mate, things are looking better and better for you!!!)

    MY NOTE: File that claim, you're very likely to get ALL of the money you expended at your employer's direction.)


    SPECIFIC DEDUCTION AUTHORIZATION:

    Pursuant to N.C.G.S. §95-25.8, Withholding of Wages, an employer may withhold or divert any portion of an employee’s wages when:

    N.C.G.S. §95-25.8(a)(1) - The employer is required to do so by state or federal law. (Example: income taxes, FICA and court ordered garnishments.)
    N.C.G.S. §95-25.8(a)(2) - The amount of a proposed deduction is known and agreed upon in advance and the written authorization is: (a) signed on or before the pay day in which the deduction will be made, (b) includes the reason for the deduction, and (c) states the actual dollar amount or percentage of wages that are to be withheld.
    Example: John Smith is hired by the Any Company on Nov. 1, 2005. John is issued a cell phone valued at $150 on his first day of employment, and he signs/dates a payroll deduction authorization that states:



    I, John Smith, have received a cell phone valued at $150 to use in conjunction with my work assignments with Any Company. I understand that if I fail to return the phone upon my separation of employment, $150 will be deducted from my final paycheck.



    ______________________

    Signature Date

    This deduction authorization is valid, regardless of if John Smith leaves the company after one month or five years of employment. The authorization meets all of the requirements set out in the current deduction provisions. It is signed in advance of the deduction being made, it includes the reason for the deduction, and it includes a specific dollar amount. No additional notice to the employee is necessary prior to the deduction being made, nor can the employee withdraw the authorization since the deduction is for the benefit of the employer.

    Note: An employee may withdraw their written authorization for a specific deduction if the deduction is for the benefit of the employee. Deductions for the benefit of the employee include, but are not limited to, savings plans, parking fees, charitable contributions and uniforms that are NOT required by the employer. A written authorization for specific deductions that are for the benefit of the employer may NOT be withdrawn by the employee. Deductions for the benefit of the employer include, but are not limited to, use of the employer’s equipment, cash register shortages, inventory shortages and uniforms that are required by the employer.

    To withhold or divert a portion of a current employee’s wages for cash shortages, inventory shortages or loss or damage to an employer’s property, the employer may make deductions from wages upon providing seven days notice in addition to complying with the other deduction provisions, including the written authorization requirements and the deduction limitations of the minimum wage and/or time and one-half overtime pay, as these items are for the benefit of the employer. If the employee’s employment is discontinued for any reason, the deduction may be made without regard to the seven-day notice.
    Example: Sally Jones begins work in a retail store as a cashier on Nov. 1, 2005. On her first day of employment, Sally is told that if her cash register is “short,” and she is subject to deductions from her pay to recover the shortages. Sally signs/dates a written authorization stating:



    I, Sally Jones, understand that if my cash register drawer is “short” for any reason, payroll deduction to offset the shortage will be made from my paycheck for the pay period following the date the shortage is discovered.



    __________________

    Signature Date

    On Dec. 1, 2005, Sally's cash register is short $50. On Dec. 2, 2005, the retail company provides Sally with a written notice stating, “Per your signed authorization dated Nov. 1, 2005, a deduction of $50 will be made from your paycheck dated Dec. 15, 2005, because of your cash drawer shortage on Dec. 1, 2005. You have the right to withdraw your authorization in writing prior to Dec. 15, 2005.” The written notice is provided at least seven days in advance and no additional authorization is required from Sally.

    BLANKET DEDUCTION AUTHORIZATION:

    N.C.G.S. §95-25.8(a)(3) - If the amount of a proposed deduction is NOT known in advance, the employer must have written authorization from the employee that is signed before the payday from which the deduction is to be made and that states the reason for the deduction. Prior to actually making a deduction, the employer is required to provide the employee with a WRITTEN NOTICE of the actual amount to be withheld and the employee must be informed in writing of his right to withdraw the authorization. The employee must inform the employer in WRITING if they want to withdraw their written authorization.
    Example: Any Company issues John Smith a laptop computer on his first day of employment. The company wants to ensure that John returns the computer upon his separation, but the “value” of the computer is difficult to predict, based on depreciation, technology changes, etc. Therefore the amount of the proposed deduction is unknown and the authorization would state:



    I, John Smith, have received a laptop computer from Any Company for use in the course of my employment. I understand that if I fail to return the laptop upon separation from the company, Any Company may deduct the value of the laptop from my final paycheck.



    __________________

    Signature Date

    Prior to making a deduction; however, Any Company must provide John Smith with a WRITTEN NOTICE stating, “Per your signed authorization dated Nov. 1, 2005, a deduction of $450 will be made from your final paycheck if you fail to return the company owned laptop computer. You have the right to withdraw your authorization. Request for such withdrawal must be made in writing within five days of receipt of this notice.” ( *see “Note of Important Issues” number 1 below.) The written notice given to John does not require his signature. John may not verbally withdraw his authorization; it must be done in writing.

    NOTE ON IMPORTANT ISSUES:

    Deductions for the employer’s benefit are limited as follows: (a) in non-overtime workweeks, wages may be reduced to the minimum wage level but cannot go below the minimum wage (currently $7.25 an hour), and (b) during overtime workweeks, wages may be reduced to the minimum wage level for the first 40 hours; however, NO deductions can be made from the full time and one-half overtime wages (based on the employee’s regular rate of pay). Deductions for the employee’s benefit are not limited.

    Advances of wages to an employee or to a third party at the employee’s request and the principle amount of loans made by an employer to an employee are considered a “prepayment” of wages and the recoupment of these amounts is not a deduction from wages; therefore, a written authorization for the recoupment is NOT required and there is no limit to the amount of the pay-back by the employee. However, if an employer charges an employee interest or a bookkeeping fee, then a signed authorization must be obtained from the employee before a deduction for the interest or fee may be made, and the minimum wage and/or time and one-half overtime pay limitations apply. A bona fide employer error that results in an overpayment of wages to an employee is also considered a “pre-payment” of wages and may be recouped from subsequent wages without regard to the deduction requirements. In other words, employer advances in pay, the principle amount of an employer loan and bona fide employer overpayment errors do NOT require a written authorization from an employee in order for the employer to take these “pre-payment” amounts back and there is NO minimum wage and/or time and one-half overtime pay limitation. Note: The federal wage and hour law does not recognize the advancement of vacation leave as wages; therefore, federal law regards the recoupment of advanced unearned vacation leave as a deduction from wages for the employer’s benefit.

    An employee must receive WRITTEN notice at least 24 hours before a wage or wage benefit decrease takes effect. The old regulations did not define “prior” notice. The prior notice requirement also applies to changes in commission/bonus-calculation formulas and production standards that result in the reduction of an employee’s pay. As in the past, pay increases may be provided retroactively.

    Although the N.C. Wage and Hour Act permits the deductions discussed above with proper authorization and notification, an employer is prohibited from making any deductions that are for the employer’s benefit from the “guaranteed salary” part of an EXEMPT employee’s wages under both state and federal wage and hour laws for executive (supervisory), administrative or professional employees.

    Revised October 2017

    For more information about workplace rights, please contact our toll free number at 1-800-NC-LABOR (800-625-2267).
     
  4. CasadeGryffindor

    CasadeGryffindor Law Topic Starter New Member

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    Army Judge, thank you for that detailed information and references. I will be responding to the termination letter that I do not consent to the paycheck deduction. The next step will be reporting to the NCDOL if they continue with the paycheck deduction.

    Thank you.
     
    retic likes this.
  5. army judge

    army judge Super Moderator

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    You're most welcome, mate.

    My wish for you is to find a higher paying, more rewarding employer, who'll appreciate you and reward your work accordingly.

    Meanwhile, have a safe, enjoyable Independence Day weekend.
     
    CasadeGryffindor and Red Kayak like this.

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