Deductions for repayment to the employer of a bona fide loan to an employee may be made from the employee's paycheck, provided the employee authorizes the deduction in writing either at the time the loan is made or at a later time, and the deduction is for the convenience of the employee (PA Code Tit. 43 Sec. 260.3 and 34 PA Admin. Code Sec. 9.1).
The signed authorization should include a clear statement of the amount and term of the loan, and the amount of the deduction should be obtained from the employee. The amount of the deduction should also be included on the statement of deductions provided with each paycheck.
Last reviewed on January 22, 2016.