Are Deductions from Employee Wages Proper?

In Utah, an employer may not deduct, withhold, or divert any part of an employees wage except in specific circumstances, including as required by court order, by state or federal law, or by express written authorization of the employee. The regulations implementing this statutory provision are very restrictive with respect to express written authorizations that are permitted.

a. Deduction to Pay for Goods and Services

An employer may not deduct from wages payment for the purchase of goods or services unless the “[e]mployee has . . . possession of the goods or services” and the employee has given written authority for the deduction. An employer may also not deduct for tools of the job unless the above conditions are met plus the employer must repurchase the item at the employee’s option at a “fair and reasonable price” at the termination of the employment relationship.

b. Deduction for Negligent or Criminal Acts of Employees

An employer may not deduct damages suffered due to the “employee’s negligence” unless the negligence and damage “arise out of the course of employment,” the employer has not received payment from another source including insurance, the withdrawal is related to the amount of damage, and the damage is above ordinary wear and tear. However an employee’s negligence and the amount of damage can only be determined “by a judicial proceeding,” by a pre-published and written procedure and the employee’s signed written authorization, or any other provision allowed by law.

Additionally, an employer may not deduct for damages or loss caused by an employee’s criminal conduct unless (1) the employee has been adjudged guilty, (2) the crime arose out of the employment relationship, (3) (a) the property of the employer cannot be recovered, or (b) the employee willfully and admittedly in fact destroyed the company property.

An employer is also prohibited from deducting amounts for cash shortages unless (1) an employee has signed a written acknowledgment that he or she will be responsible for shortages, (2) the employee verifies the amount in the register and the employee gives a written acknowledgment of the verification at the beginning and end of his or her shift, and (3) the employee is the sole user of the register.

An employer is further restricted from deducting for lost tools unless the item was assigned during the employment, the employee gave written acknowledgment of the receipt of the item, and the item was not returned to the employer upon termination.

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