Alabama law does not restrict an employer's right to make deductions from employees' wages to repay loans made by the employer.
Employers, however, should obtain a signed authorization to make a deduction that includes a clear statement of the amount and term of the loan and the amount of wage deduction to be made per pay period. The amount of the deduction should also be included on the statement of deductions provided with each paycheck.
For additional information, contact:
Alabama Department of Labor
P.O. Box 303500
Montgomery, AL 36130-3500
Last updated on December 21, 2015.