Know the Law: Legal Paycheck Deductions

Photo of Amy Cann
Amy M. Cann
Of Counsel, Litigation Department
Published: Union Leader
June 17, 2023

Q: Sometimes, our employees lose their uniforms or quit their job with a negative PTO balance. Can we, as an employer, make deductions from the employee’s final paycheck to cover the cost of the lost uniform or the unearned PTO? 

A: Under New Hampshire law, RSA 275:48, lawful wage deductions fall into two categories: either an authorized deduction under federal or state law or a deduction that is voluntarily authorized by the employee “to the benefit the employee.” Deductions cannot grant financial advantage to the employer.

In New Hampshire, you cannot require your employees to buy uniforms with “a company logo or fashion of distinctive design,” which serves as a “means of identification or distinction” because uniforms primarily benefit employers. If an employee loses or damages their uniform, you cannot make them buy replacements. However, employees can be subject to discipline if they are repeatedly careless with company property such as uniforms.

On the other hand, if your written company policy allows employees to use PTO time in advance of eligibility, you can lawfully deduct the remaining balance from their final wages, but only if:

  • You have a written request from the employee;
  • made at the time of the original request without coercion or pressure; and
  • that authorizes you to deduct the amount the employee may owe from the employee’s final wages at the termination of employment.

Knowing wage laws in the states where you have employees working is essential. Issues with wage deductions frequently trip up employers and can result in compensatory damages, penalties, and legal fees.

Know the Law is a bi-weekly column sponsored by McLane Middleton. Questions and ideas for future columns should be emailed to Know the Law provides general legal information, not legal advice. We recommend that you consult a lawyer for guidance specific to your particular situation.