Payroll Client AccessIllegal Wage Deductions in Wisconsin: Employer Guidelines Illegal Wage Deduction Examples
Wisconsin law prohibits employers from deducting wages for defective workmanship, lost or stolen property or damage to property unless the employee gives written authorization for each specific deduction after the loss occurs.
Employers cannot issue blanket pre-authorizations during hiring, nor can they deduct amounts to bring pay below the minimum wage. Deductions for employer-required medical exams, unemployment insurance contributions or for general business losses without proper written consent are also illegal.
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Prohibited Wage Deductions in Wisconsin
| Category | Details |
|---|---|
Business Losses and Property Damage |
Employers cannot deduct pay for business losses, cash shortages, damaged or missing property, or faulty workmanship unless the employee signs a written authorization after the incident and before the deduction occurs. Blanket authorizations signed at hiring or in advance do not satisfy legal requirements. |
Minimum Wage Protections |
Any deduction causing an employee’s pay to drop below minimum wage violates both state and federal law. |
Other Prohibited Deductions |
Deductions for employer-required medical exams are not allowed. Employers cannot deduct for unemployment insurance contributions or require employees to pay any portion of these costs. Deductions based on an employee’s endorsement of a paycheck or signature on a timecard are not considered valid authorization. |
Final Paychecks |
The same rules apply to final paychecks: deductions for faulty work, lost property, or damages are not allowed unless proper written authorization is obtained after the loss. |
Legal Wage Deductions: When Are They Allowed?
Legal wage deductions in Wisconsin are allowed only when the employee provides written authorization for a specific deduction after the loss or damage occurs and before the deduction is made, when both the employee and a representative agree the loss resulted from negligence or intentional conduct or when a court determines the employee is liable for the loss.
Why Work with BenHR on Wage Deduction Compliance?
BenHR, Wisconsin’s leading HR consulting service, helps employers avoid costly wage deduction mistakes by developing compliant payroll and deduction policies, providing guidance on final paycheck procedures, training managers to handle wage issues correctly and protecting businesses from wage and hour claims. With BenHR’s expertise, your company stays shielded from penalties, double damages and employee disputes. BenHR manages your wage compliance so your business remains secure.