Payroll Client AccessWhat Is Illegal to Deduct from Wages in Wisconsin? Illegal Wage Deduction Examples & Employer Guidelines
BenHR > Wage Deduction
In Wisconsin, employers cannot deduct wages for defective work, lost or stolen property or property damage unless the employee provides written authorization for each deduction after the incident. Blanket authorizations signed at hiring are invalid and deductions cannot bring an employee’s pay below minimum wage.
Employers must also avoid prohibited deductions for required medical exams, unemployment insurance contributions or other business costs without proper consent.
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Prohibited Wage Deductions in Wisconsin
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 loss and before the deduction occurs. Blanket authorizations at hiring do not meet this requirement.
Minimum Wage Protections
Deductions lowering an employee’s pay below the state or federal minimum wage are prohibited.
Other Prohibited Deductions
Employers cannot deduct for employer-required medical exams or unemployment insurance contributions. They also cannot use paycheck endorsements or timecard signatures as valid authorization.
Final Paychecks
The same rules apply to final paychecks: deductions for losses, damages or defective work require post-incident written authorization.
When are Wage Deductions Legally Allowed?
Wisconsin permits wage deductions when the employee signs a specific written authorization after a loss or damage occurs, when both the employee and an authorized representative agree the loss resulted from negligence or intentional conduct or when a court determines liability.
Why Work with BenHR on Wage Deduction Compliance?
BenHR helps employers avoid wage deduction mistakes through compliant payroll policies, guidance on final paycheck handling and manager training on proper deduction procedures. Our team works to reduce the risk of penalties, double damages and employee claims while keeping your payroll practices aligned with Wisconsin law.