From the Hotline: Medical Premiums and Paycheck Deductions

Question: Can we take “double” deductions from an employee’s paycheck to cover medical premiums when s/he resigns mid-month?

Answer: When an employee is terminating, final wages are subject to amounts authorized in writing by the employee under a salary reduction agreement. Remember state laws govern what can legally be deducted from wages.  Most state laws provide employers can deduct the following from wage amounts authorized by federal or state law (e.g. income tax); garnishments, and amounts pre-authorized by employees in writing.

Therefore, provided the salary reduction agreement specifies “x” to be deducted from each “paycheck,” the employer may deduct that amount and nothing more.


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