Money Owed by an Employee

GLC · September 2007

We have an Educational Assistance Program that states that if an EE leaves our employment, for any reason, within one year of completing the course, they have to reimburse us for the monies they received for the cost of the course, books, etc. The Agreement also states that any sums due from the Employee must be paid before the last day of employment. If unpaid at the last day of employment, the Employee agrees that we may withhold and retain from the final pay any sum due FCF. The question I have is about the last statement regarding withholding any sum owed. Don't we still have to follow the rule about always paying an EE at least the minimum wage. So essentially, we would not be able to hold the person's entire check because they would have to be paid at least minimum wage even though they signed a document stating that we could. Is that correct or could we take their entire check to pay the education debt?

Myrna Minkoff · September 2007

You probably need to check applicable KY law to make sure that you can make a deduction, but under federal law I do not believe that you can withhold pay that would result in the employee making less than minimum wage - even with a written agreement.

Dutch2 · September 2007

In our state, we must pay at least minimum wage after any deductions on the final paycheck. Final paycheck rules vary by state and "are replete with illogocial requirements and technical deadlines." By all means check with your state reg's as some states prohibit certain types of deductions from final paychecks.
Good luck.

hrdilemma · September 2007

Arkansas law only allows us to withhold from a final check any monies due the same as for any garnishment. 25% of disposable earnings but always paying min. wage.

We have a similar program here and if it isn't paid we have a promissory note signed for the remainder of the funds not eligible to be withheld from the payroll and schedule payments from the separation date. If they don't pay then we allow our credit collection people to take over. Good luck....

Dutch2 · September 2007

Hey HRdilemma... what part of the great state of Arkansas are you located?
A misplaced Arkansan asking...

hrdilemma · September 2007

Dutch, I was born and raised in Little Rock, as a young adult flew the coup and traveled for awhile but I came home several years ago and I love it here. One thing they say in Arkansas if you don't like the weather stick around it will change.

Dutch2 · September 2007

Born and spent my young years just below the boot heal in Blytheville, then attended college in Jonesboro. Spent several years in the Fort Smith and Bentonville areas. Weather is 'bout the same here in cental MO.; 'cept we tend to get more snow and less ice than you do in Little Rock. I was last in Little Rock about 6 years back when my sons competed in the International ATA tournament.

hrdilemma · September 2007

I must admit I like the mountains far more than the city but job market calls me here. I escape to the mountains often and even over Branson way.

That is the only part of AR I guess I hate...ICE
But I love me some "UofA Hogs"

HRMM · September 2007

I agree that you should check in with KY laws. The TX DOL sent me a book and also told me on the phone to get agreements signed up front for specific amounts...with that we can take it all. They also told me if the agreement is too general...after a fight we would at least have to pay the minimum wage because no amount was agreed to. We have many that get signed now. One of our agreements states we can recover up to 500.00 for this particular issue and then also states how it will be calculated. After you check with KY...I would suggest coming up with an amount in your agreements that at least won't leave you holding the entire bill.
MM

Money Owed by an Employee

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