Under state and federal laws, an employer typically cannot withhold or fail to pay the salary or wages you earn. Illegal salary withholding occurs when an employer:
- Refuses to issue full compensation for the hours you worked,
- Makes illegal payroll deductions, or
- Fails to pay the minimum wage or overtime to an eligible worker.
Unfortunately, illegal salary withholding and wage theft is a common problem. It’s important that you understand your rights under city, state, and federal wage and hour laws.
Is Withholding Salary From an Employee Legal?
In most cases, withholding an employee’s salary is illegal. However, there are certain situations where salary withholding is permitted. They include:
- Voluntary Deductions: Your employer can make deductions that you have authorized, such as payment of health or disability insurance premiums, charitable contributions, or union dues.
- Income Withholding Orders: Sometimes, a court will order payroll deductions for unpaid taxes, child support, or other debts. Your employer must comply with a court-imposed withholding order.
- Losses Caused by the Worker: In some states, your employer can deduct shortages or the replacement costs for broken or damaged property. However, these deductions typically cannot take you below minimum wage.
- Uniforms, Tools, Lodging, and Meals: In some states, the cost of uniforms, tools, and other employee benefits can be deducted from your check.
If you have questions about a deduction or want to protest a wage garnishment, contact a lawyer for help.
Exempt vs. Non-Exempt Employees
Additionally, not all workers are eligible for overtime and minimum wage protections. For example, some states set a different, lower minimum wage for employees who receive tips (such as restaurant servers). Other workers can be exempt from wage and hour protections if they are:
- Freelance or contract workers,
- Administrative, executive or professional workers, or
- Performing specific jobs (such as outside sales or IT jobs).
However, employers sometimes intentionally miscategorize workers as exempt to avoid minimum wage and overtime payments. If you believe you should be a non-exempt employee, contact a government wage and hour agency or an employment lawyer for assistance.
What are the Legal Consequences for Wrongfully Withholding Salary?
If your employer wrongfully withholds your salary, you have rights. You may file:
- An administrative complaint with a wage and hour agency,
- A lawsuit against your employer, or
- Criminal charges.
Each of these options involves a different process and penalties. However, it is important to act quickly since strict filing deadlines apply.
Administrative Actions for Withholding Salary
Both state and federal government agencies enforce wage and hour laws. If your employer improperly withholds your salary, you can file a complaint with either the federal Wage and Hour Division or a similar state agency.
Once the government agency receives your complaint, it will investigate your claims. If there are violations, you may recover back wages and liquidated damages. Depending on your situation, it may negotiate a settlement on your behalf or the government may pursue a lawsuit against your employer.
Civil Lawsuits for Withholding Salary
You may also have the right to file a civil lawsuit against your employer, demanding compensation for your lost wages. However, you cannot file an administrative complaint and a civil lawsuit at the same time. (Once the administrative claim is closed, you can file a lawsuit—as long as you are within the statute of limitations.)
In a civil lawsuit, you can recover your unpaid wages and liquidated damages. Additionally, your employer may be responsible for your attorney fees and litigation costs.
Criminal Cases for Withholding Salary
If the government believes your employer willfully violated wage and hour laws, it can file criminal charges. If convicted, your employer may face jail time and significant fines.
Do I Need to Contact a Lawyer for Issues With Withholding Salary?
If your salary was improperly withheld, contact an employment lawyer for help. Salary withholding claims may involve administrative processes and litigation. A lawyer can help you understand your rights and help you properly file a claim against your employer.