From the Hotline: Service Charge for Loss of Paycheck

Question: When an employee loses his or her paycheck, may we charge a fee for re-issuing the check?

Answer: Implementing a service charge for the payment of wages would violate state and federal laws. Under some state regulations, employers may only deduct funds from an employee’s wages for cash register shortages, damage to equipment, repayment of a cash advance or loan, or for purchases made at the place of business. Under federal regulations, employees may not be required to pay for any of the cost of items for the convenience of the employer if their wages would be reduced below the required minimum wage or overtime compensation for the pay period being paid. This is true even if an economic loss suffered by the employer is due to the employee’s negligence.

If the same employee or employees are often requesting duplicate paychecks, then treat the matter as a performance issue by coaching and counseling the employee(s) regarding the impact of a lost pay check in terms of company resources. Another consideration is to make direct deposit of payroll checks available to all employees, and especially encourage those employees who are prone to losing checks to enroll in direct deposit.