If an Employer Makes Improper Deductions From Pay, Overtime May Be Owed

Galvin B. Kennedy
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Galvin Kennedy is a founding partner of Kennedy Hodges. He focuses his practice to overtime and wage claims.
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Working in the oil and gas industry often requires working extra hours and putting forth extra effort. Many workers may find themselves putting in workweeks that are well in excess of 40 hours. When this occurs, the worker is often entitled to overtime compensation for the extra time that is worked. Unfortunately, employers sometimes look to find ways to get around paying the required overtime. One such method that may be used is to make deductions from an employee’s weekly wage that has the effect of bringing the total below the required overtime pay. In some cases, these deductions are permissible. Employees should pay close attention to their paychecks, however, in order to ensure that they are being compensated for all of the overtime for which they are entitled.

Five Costs Potentially Deductible From Wages by an Employer

The following is an overview of the limited types of costs that are sometimes permissible to be deducted from an employee’s wages during an overtime week:

  1. Payroll taxes that the employer is required by law to deduct. It is important to note, however, that it is legal for the employer to deduct these taxes from the employee’s wages during an overtime week only if the employer actually pays the taxes to the government as required.
  2. Money that the employer is ordered by a court to deduct from your pay.
  3. Money that is used to repay an advance on your wages provided by your employer. However, you must have received this money and were free to spend it however you chose. You also must have agreed in writing that it could be deducted from your wages.
  4. Money that is used to repay a loan given to you by the employer.  However, this deduction is subject to the same restrictions that apply to money used to repay an advance on wages.
  5. The cost of meals and housing provided to you by your employer. If you actually received the meals and housing, you agreed in writing that the costs could be deducted from your wages, the employer deducts only the actual cost incurred—regardless of the alleged market value—and the employer kept accurate records to specifically document the actual cost of the meals and housing you received.

Wage and overtime issues are complex and often require guidance from an experienced attorney. If you suspect that you may have been denied compensation that was rightfully owed to you, we suggest that you take steps to learn more. Check out our free guide, 10 Biggest Mistakes That Can Hurt Your Wage & Overtime Claim, for more information.


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