As a new feature, each week, we will share legal articles and updates from around the country that may have an impact on our clients.
Conde Nast Ends Its Internship Program - As more of the larger companies are being sued for not paying their interns, more of these companies will decide that the risks are no longer worth the benefit. If you have unpaid interns in your office, this may be something to think about.
EBay Settles Class Action - If you were selling on eBay, you may be able to take part in the settlement.
This past week, new rules from the Department of Labor went into effect. These rules make some changes to the way employee deductions can be made – now there are five broad categories of permitted deductions. The first three are unchanged.
- Required deductions – these are deductions for state and federal taxes, as well as any other deductions required by law, such as garnishments.
- Union dues
- Deductions for the employee’s benefit – this includes health insurance, day care, and other company-provided services where the employee receives a benefit. Services that are for the employee’s convenience (such as check-cashing) are not considered a benefit and fees cannot be charged/deducted. While this regulation is unchanged, the DOL has provided additional clarification and categories of employee benefit.
The two new ones are:
- Repayment of salary advances
- Repayment of overpayment of salary
Both categories require the employee to be told how the deduction will be made. In the case of the salary advance, the employee must be given the terms of the advance (how much will be advanced, how much each deduction from future wages will be, when the deductions will cease) ahead of time. In either case, employers must have a written grievance procedure and, if the deduction is grieved, the employer must halt deductions. For salary advances, it is also important to be aware that the employer cannot charge interest under this program.
The new regulations do not change many existing rules – for example, employers still cannot fine employees for tardiness or other workplace rule infractions and take those fines out of employee salaries directly. While you can discipline employees for these infractions with suspensions or firing, you cannot make them work while deducting salary.