Worker pay issues at end of employment
A recent ruling by the U.S. Court of Appeals for the Ninth Circuit has impacted how employers can take pay deductions from terminated workers in California.
A major big box store chain voluntarily provided part of employee pay as a line of credit on a company-issued card, according to labor lawyers Shane Sagheb and Michael D. Thompson of law firm Epstein Becker Green. When those workers ended their time at the company, the employer the outstanding balances on the cards from accrued but unused sick leave and vacation time.
That action led to a lawsuit filed by the former employees based on state and federal Fair Labor Standards Act requirements about the limiting of of employee wage deductions. The FLSA provides a number of allowable situations that can result in reduced pay for employee attendance, but limits the items to those specifically enumerated in the act.
The appeals court eventually ruled that the actions taken by the company did not violate the FLSA because the balance on the cards was legitimate and deducted from sick and vacation pay, which are not specifically protected from garnishment under the act. Although the ruling begins to set a precedent, Sagheb and Thompson recommend companies in California wait for other state courts to make similar rulings before carrying out such an act.
All data and information provided on this news blog is for informational purposes only. Infinisource makes no representations as to accuracy, completeness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis. Information regarding employment suits and other legal action is not updated after publication, and may not be current.