She quit and she owes us money.....

brown

We have an employee who has resigned. The problem is that she owes us for two weeks vacation that she took but had not yet accrued. Can I withhold that amount that she owes from her final paycheck?

Hunter1

We routinely do it, but it is part of our vacation policy. Vacation gets 'booked' on the first of the year, but it's not earned until the anniversary date. That's explained to new employees, so they understand that we will pro-rate vacation on actual time worked if they use it and leave before they've earned it. We also have a policy that after 5 years, this rule is no longer used. We pay out vacation in the year it's put on the employee's record, and pro-rate the final calendar year.

All that said, you need to check if your state has rules concerning this topic.

deniseE

also check your policies....depending on the state law...you may be able to file a civil suit to collect.

HRlifer

We allow employees to carry a negative balance of up to 22.5 hours. Once an employee has gone negative, we have them sign a form authorizing the company to deduct the owed hours out of their final paycheck if their employment terminates prior to the balance being in the positive. This way we have the employee's acknowlegement and authorization to take a deduction out of their final pay if necessary.

marc

My understanding is that you cannot deduct anything from an ees check without their written permission, regardless of handbook provisions.

Mentel

We are also on an accrual system. Employees know that they owe it back to us if they use more than has been accrued. It is in our handbook and new employees are specifically told about this policy. We don't actually deduct it without the employee's signature on an authorization. Employees know the policy and don't have a problem with the authorization. If someone refused to sign the authorization, they can bet that they are a no rehire!

Pork

In this case you can prove that you have already paid her. You are not collecting anything you are stopping and over payment, you do not need her permission!!!

PORK

marc

[font size="1" color="#FF0000"]LAST EDITED ON 09-19-03 AT 05:42PM (CST)[/font][p]The payment for vacation not earned is considered a "loan" in this case, not an accidental overpayment. Loans cannot be deducted from a paycheck without the signed authorization.

ray a

We routinely adjust ee's last paycheck by either adding unused accrued PTO or deducting unaccrued used PTO. It is in our handbook and it is explained to new hires on their first day. Never had a legal challenge to the policy, but there are some unhappy people when they find out how small their last check will be. The bigger problem is the ee who has not earned enough in the last check to cover what they owe.

Shadowfax

In most states, an employer is in no better position to collect a debt than any other creditor. I know of no deduction from an e/ees pay that is legitimate w/o the employees' specific written authorization. Dangerous practice, and just because you've never been cahallenged, doesn't make it right.

WOCO Frank

I'd like to further discuss this practice of routinely allowing people to take vacation they haven't earned yet. Is that common?

marc

It used to happen here quite frequently. Once we took a look at what was going on and analyzed our exposure, we tightened up the whole process. It now occasionally happens through oversight, but we look at after every payperiod now. Occasionally one slips through for a couple of hours here and there, but overall it is not allowed.

HRQ

We allow employees to go negative up to 20 hours, as long as they are not on a final warning. We don't offer it up front, but consider it if the employee requests it. It's not in a policy anywhere, but it's been in practice.

The few times it has been used have been emergency absences such as unanticipated FMLA. We haven't been stuck yet, and the employees who've been able to take advantage of this have been grateful.

ray a

[font size="1" color="#FF0000"]LAST EDITED ON 09-24-03 AT 01:59PM (CST)[/font][p]How about this? Our employee handbook clearly states we will deduct any unearned monies that were paid to the employee from their last paycheck. Every employee receives a hard copy of the handbook and I address this policy during orientation. Does the fact that the policy clearly states we will deduct and we have a signed receipt from the employee constitute written authorization?

WOCO Frank, paying in advance of earning is part of our policy and done routinely. Some people realize that if they time their departure just right, we will be unable to get the money back. They resign after the last check is in their hand. HR has addressed this with our executive committee, but they believe that changing the policy would result in punishing the "innocent", those who do not abuse the system. They would rather take the hit from the small number of dishonest people than to punish the vast majority of those who are honest.

WOCO Frank

How many of you pay your employees before they work the time?

I guess I'm not sure why paying for vacation that hasn't been earned yet would be any different...

marc

Any deduction from the paycheck must be specifically authorized. The handbook receipt and the policy therein are not enough. The authorization is for a specific deduction and amount or a series of deductions and amounts.

Blanche

This topic is governed by state law, and states vary widely & creatively on what is both allowed under the letter of the law and deemed "Acceptable" by the state enforcer of wage & hour laws. Some states permit deductions for certain "debts" without employee approval, some allow deductions from final wages only with the written authorizations described by other posters, and there are a few state W&H enforcers that take the position that a deduction from wages for a debt to the Company is never appropriate (I guess we are supposed to treat employee debts like accounts receivable matters). In any case a deduction is made, though, most states would expect the employee to receive at least minimum wage (gross) after deduction.

In CT, the statute that governs is Conn. Gen. Stat. §31-71e, which would allow a deduction of this sort only with the employee's written authorization on a form approved by the Labor Commissioner.

(of course this is not legal advice - this comes from a pet project of mine which included contributions from outside counsel)