Wage Deductions Law

In Minnesota, multiple statutes protect employees from unlawful wage deductions. Our experienced employment attorneys have helped many employees recover lost wages owed to them.

The Minnesota Payment of Wages Act prohibits deductions by employers from the wages of employees without prior written authorization. Additionally, the Minnesota Fair Labor Standards Act prohibits wage deductions by employers if such deductions drop an employee’s wages below minimum wage. Common deductions that when subtracted from wages could reduce the wages below minimum wage include:

  • purchased or rented uniforms or specially designed clothing required by the employer, by the nature of the employment, or by statute as a condition of employment, which is not generally appropriate for use except in that employment;
  • 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;
  • consumable supplies required in the course of that employment;
  • deductions for medical or physical exams; and
  • travel expenses in the course of employment except those incurred in traveling to and from the employee's residence and place of employment.

Unlawful Wage Deductions May Entitle an Employee to Compensation

When an employer has made unlawful deductions from employees’ paychecks, those employees may be entitled to both wage deduction damages and liquidated damages. Additionally, employees may be entitled to attorney fees and costs.

In many states it is illegal for businesses to take deductions from their employees' wages. An employer can often only withhold amounts from your wages when:

  • required or authorized to do so by state or federal law;
  • a deduction is authorized in writing by the employee to cover insurance premiums, benefit plan contributions or other deductions; and
  • a deduction to cover health, welfare, or pension contributions is expressly authorized by a wage or collective bargaining agreement.

Tip-Pooling: The Sharing of Gratuities with Non-Service Employees Is Prohibited

Further, in Minnesota, no employer may require employees to share their gratuities or contribute tips to a fund or pool. (See Minnesota Department of Labor and Industry Fact Sheet on Tip Credit, Tip Sharing, and Tip Pooling.) Service employees, including wait staff, bartenders and other staff are often at the whims of their employers when it comes to tipping policies.

Nationwide, many service positions involve sharing or pooling tips with other members of the staff. While some of these policies are legal in other states, Minnesota has a very strict standard and employers can be held liable if their tip policies violate federal or state wage and hours laws. Minnesota courts have stated that pooling or sharing gratuities “may not be a condition of employment.” Workers who feel coerced or pressured to participate in tip sharing can take legal action to protect their rights and earnings. Any employee who refuses to share tips and is harassed or coerced into participation should consult with an experienced wage and hour law attorney. Such policies could result in liability for employers and damages for employees.

Contact Our Minnesota Employment Lawyers
If you believe your employer has deducted wages without your permission or forced you to share tips with other employees, we want to hear from you. The employment lawyers at Baillon Thome Jozwiak & Wanta LLP are dedicated to protecting the wage and hour rights of Minnesota employees and provide a free initial consultation. Contact us to discuss your rights.