Virginia Deductions From Pay laws & compensation compliance analysis

Virginia Deductions From Pay: What you need to know

Virginia law restricts the right of an employer to make deductions from an employee's pay (VA Code Sec. 40.1-29). Employers may make the following deductions:
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• Deductions required by law (e.g., garnishments)
• Deductions for payroll, wage, and withholding taxes
• Other deductions, with the employee's written and signed authorization
• Deductions for wage assignments, which are subject to special rules (See Assignment of Wages in this section.)
An assignment of wages is an agreement between an employee and one of his or her creditors under which the employee voluntarily gives the creditor the right to collect a portion of the employee’s wages for repayment of a debt. There are two types of wage assignments in Virginia. Either one may require the employer to make deductions from an employee’s wages.
One type of wage assignment involves an employee who, under court supervision, is making an honest effort to repay his or her debts. In this situation, the employer pays all the employee’s earnings to a court-appointed trustee. The trustee determines the amount of wages that is exempt from the assignment and pays that amount to the employee. The remaining wages are paid to the employee’s creditors on a pro rata basis (VA Code Sec. 55-161, et seq.).
The other type of wage assignment involves an employee who agreed to the assignment in the event of default at the time the debt was incurred and has now defaulted in making payments (VA Code Sec. 40.1-31). In this situation, the employer deducts a certain amount of the wages each pay period and forwards it to the creditor, provided the wage assignment satisfies all of the following requirements:
• The employer has given its express written ...

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