TAG

Pay practices

Deductions, reimbursement, and wage compliance.

EMP-03 · 01

Wage Deductions and Business-Expense Reimbursement Rules

8 MIN · EMP

Federal law sets a floor on paycheck deductions and says almost nothing about expenses; state law does the opposite. This brief separates the two layers and applies them to the deductions employers actually attempt.

Under the free-and-clear rule at 29 CFR 531.35, required wages must reach the employee unconditionally, with no direct or indirect kickback.
Deductions for items primarily benefiting the employer may not push pay below the minimum wage, and may not cut into overtime compensation at all.
Improper deductions from an exempt employee's salary can defeat the exemption; 29 CFR 541.602 lists the narrow permitted categories.

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EMP-05 · 02

Payroll Records and Wage-Hour Audits: What Investigators Examine

8 MIN · EMP

Recordkeeping is the one wage-hour obligation that has no good-faith defense: either the record exists or it does not. This brief sets out what must be kept, for how long, and what an investigator does with it.

FLSA section 11(c) and 29 CFR Part 516 require specified payroll records to be kept three years, with wage-computation records kept two years.
A Wage and Hour investigation typically reviews records, interviews employees privately, and can seek back wages plus an equal amount in liquidated damages.
Missing or unreliable time records shift the practical burden: employees may prove hours by reasonable inference rather than by documentation.

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