A common practice among employers in South Florida seems to be making deductions from employee wages for mistakes made by employees. For example, if machinery breaks down due to employee misuse, many employers make deductions from the employee's wages to pay for the repair. Another example is the case where an employer makes deductions from wages because an employee shipped incorrect products to a customer or damaged merchandise or product, such as in the case where a waiter accidentally drops and breaks an expensive bottle of wine. Such deductions, however, are illegal and constitute a violation of the Fair Labor Standards Act (FLSA) if they result in the employee receiving less than the minimum wage, which is currently $7.25 per hour.
The seminal case with respect to this issue is Mayhue's Super Liquor Stores, Inc. v. Hodgson, 464 F.2d 1196 (5th Cir. 1974). That case involved a Broward County based liquor store that required all employees to sign an agreement (as a condition of employment) that any cash register shortages would be deducted from the employee's wages. The trial court upheld the validity of the agreement, but the Fifth Circuit Court of Appeals declared that the agreement requiring repayment of cash register shortages was invalid because it violated the FLSA. In doing so, the Court held that (1) an employer cannot make deductions that result in the employee receiving less than the minimum wage and (2) the right to a minimum wage cannot be waived by agreement. The Court also noted that the agreement had the effect of impermissibly shifting part of the employer's business expense to the employee, which was inappropriate as a "kick-back" under the regulations.
Another common practice is for employers to make deductions for uniforms. However, under the FLSA if the uniforms are required by the employer, by law or due to the nature of the job, or if the uniforms are specially-branded clothing that must be worn by all employees, deductions for the cost of such uniforms may not reduce an employee's wage below the minimum wage.
Finally, it should be noted that this rule cannot be circumvented by requiring an employee to purchase his or her own uniforms or, in the case of merchandise damage (such as in the case of a broken bottle of wine), by requiring the employee to replace such merchandise. These would all be considered impermissible "kick-backs" that would be unlawful under the regulations.
If you have questions regarding the employer deductions from wages under the Fair Labor Standards Act or other employment laws, contact the Law Offices of Santiago J. Padilla, P.A. as soon as possible. Based in Miami, Florida, we represent employers and employees throughout South Florida in employment cases. To set up a free initial consultation, you can contact us through the Internet or call us at (305) 358-1949.
