When is it Okay to Withhold Employees’ Wages in Washington State?
As an employer in Washington State, you may wonder if you can withhold or deduct any amount from your employees’ wages for various reasons. For example, you may want to recover the cost of damaged equipment, a cash shortage, or a loan repayment. However, before you do so, you should be aware of the legal implications and limitations of withholding employees’ wages in Washington State.
According to Washington State law, it is unlawful for any employer to withhold or divert any portion of an employee’s wages unless the deduction is:
- Required by state or federal law; or
- Specifically agreed upon orally or in writing by the employee and employer; or
- Allowed by a collective bargaining agreement.
Even if the deduction is lawful, there are some limitations on how much and when an employer can withhold employees’ wages. These limitations are:
- The deduction cannot reduce the employee’s wages below the current state minimum wage, which is $15.74 per hour as of Jan. 1, 2023.
- The deduction cannot be made from the employee’s final paycheck unless the employee has voluntarily authorized the deduction in writing and the deduction is for the benefit of the employee.
- The deduction cannot be made for the employer’s benefit or convenience, such as for uniforms, tools, training, or breakage.
- The deduction cannot be made for any loss, damage, or expense caused by the employee’s negligence, carelessness, or misconduct, unless the employee has admitted to the liability in writing, or a court has found the employee liable.
If an employer withholds employees’ wages unlawfully, the employer may face serious consequences, such as:
- The employee can file a complaint with the Washington State Department of Labor and Industries (L&I), which can investigate the claim and order the employer to pay the wages due, plus interest and penalties.
- The employee can also file a lawsuit against the employer in court, and seek damages for the unpaid wages, interest, attorney fees, and costs. In some cases, the employee may also be entitled to double or treble damages, depending on the nature and extent of the violation.
- The employer may also face criminal charges for willfully withholding employees’ wages, which can result in fines and imprisonment.
- The employer may also be subject to civil and criminal liability for unpaid withholding taxes, if the employer fails to remit the taxes collected from the employees’ wages to the federal government.
Employers should be careful and diligent when it comes to withholding employees’ wages. Otherwise, they may expose themselves to various legal risks and liabilities, which can have serious financial and reputational consequences.