An employer may withhold or divert a portion of an employee’s wages without the employee’s authorization only when the employer is required or empowered to do so by North Carolina or federal law. In all other circumstances, a valid authorization by an employee is required for an employer to make a deduction from an employee’s wages. Examples include contributions to savings plans, uniform rentals, and charitable contributions.
To be valid, an authorization by an employee must:
- Be written
- Be signed by the employee on or before the payday for the pay period for which the deduction is being made
- Show the date of signing by the employee
- State the reason for the deduction
- Only if it is a specific authorization, state the specific dollar amount or percentage of wages to be deducted from each paycheck and the number of paychecks or length of time for which the deduction is authorized
In addition, prior to the deduction taking place, the employer must:
- Provide advance written notice of the actual amount to be deducted
- Provide advance written notice of the employee’s right to withdraw authorization
- Provide the employee with a reasonable opportunity to withdraw the authorization in writing
A specific authorization may be for one or more paychecks and should state the dollar amount or percentage of wages which the employee agrees may be deducted from each paycheck. Employers must give employees a reasonable opportunity to withdraw specific authorizations if such deductions are for the employees’ convenience (for example, savings plans, credit union installments, savings bonds, union or club dues, uniform rental or cleaning not required by the employer, parking, and charitable contributions.)
