Question: We terminated an employee for falsifying payroll records and receiving pay for shifts she did not work. Can we issue her a last paycheck for hours worked and then keep the money to apply to her theft of over $100,000?
 |
Answer from the experts at HR.BLR.com:
Thank you for your inquiry. To help prevent a wage claim by the employee, your most prudent course of action is to pay her all wages due or at least wages that equal the minimum wage and collect the money she owes you in a separate action.
While it may seem easier and more efficient to withhold even a small amount (compared to what the employee stole from you and assuming you have evidence of her wrongdoing), it also could expose your organization to a wage claim under your state and federal law.
The federal Fair Labor Standards Act (FLSA) does not address pay at termination, but it does prohibit employers from making deductions from pay that would reduce the employee’s pay below the minimum wage. Your state–Pennsylvania–like most states, is very protective of employee wages once they have been earned, and has specific pay at termination and deduction requirements.
Under Pennsylvania law, employees who quit or are discharged must be paid all wages due no later than the next regular payday or by certified mail if requested (See PA Stat. Tit. 43 Sec. 260.5). Further, Pennsylvania prohibits deductions from wages, except those that are required by law or authorized in writing by the employee for the benefit of the employee and that do not reduce the employee’s wages below the minimum wage. So, you likely could make a deduction that does not take the employee below the minimum wage if you have written authorization from the employee. See Pa. Code Sec. 9.1.
If you want to withhold the wages, you should consult with an attorney to determine what risks you might face for doing so.