Arizona Deductions from Pay laws & HR compliance analysis

Arizona Deductions from Pay: What you need to know

Under Arizona law, an employer may deduct amounts from an employee's wages only in the following instances (AZ Rev. Stat. Sec. 23-352):
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• The employer is required or permitted to do so by state or federal law or by court order. Examples of lawful deductions include Federal Insurance Contributions Act (FICA) taxes, state and federal income taxes, and wages that are assigned or garnished pursuant to a court order.
• The employee issues a prior written authorization for the deduction. Examples include deductions for insurance premiums and 401(k) contributions. An employer may not withhold wages under a written authorization from the employee past the date specified by the employee in a written revocation of the authorization, unless the withholding is to resolve a debt or obligation to the employer or a court orders otherwise.
• There is a reasonable good-faith dispute over the amount of wages due, including the amount of any claim or counterclaim of debt, reimbursement, recoupment, or set off by the employer against the employee.
• The employer is required to do so by court order for the payment of child support, alimony, or other debts. There is additional information.
• Employers may not deduct from an employee's wages any amounts for the employer's cost of unemployment insurance. An employer that violates this law is guilty of a misdemeanor (AZ Rev. Stat. Sec. 23-735).
• Employers may not deduct from an employee's wages any amounts toward the premium paid by the employer for workers' compensation insurance (AZ Rev. Stat. Sec. 23-967).
If wages are paid by direct deposit or with a payroll card, the employer must furnish the employee with a statement of earnings and ...

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