Minnesota Deductions from Pay laws & HR compliance analysis

Minnesota Deductions from Pay: What you need to know

Under Minnesota law, employers may deduct amounts from an employee's paycheck as required by local, state, or federal law, or court order. In addition, employers may make payroll deductions for the following items pursuant to a written, signed contract between the employer and employee that authorizes the deduction (MN Stat. Sec. 181.06):
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• Union dues
• Life, accident and health, and group-term insurance premiums
• Group annuities
• Contributions to credit unions
• Employee stock purchase plans for periods longer than 60 days
• Savings plans for periods longer than 60 days
• Membership dues of a relief association
• Contributions to a community chest fund, local arts or science council, Minnesota benefits association, or a state or federally registered political action committee
Deductions are allowed where an employee, prior to making a purchase or loan from the employer, voluntarily authorizes in writing that the cost of the purchase or loan shall be deducted from the employee's wages, at regular intervals or upon termination of employment.
Deductions that are disciplinary fines are allowed for commissioned salespeople when there are errors in performing their job duties.
An employer may make deductions from an employee's wages for the actual cost of uniforms or equipment up to $50 per item, provided the deduction does not bring the employee's wage below the minimum wage (MN Stat. Sec. 177.24). Employees must be reimbursed the full amount deducted for uniforms and/or equipment upon termination of employment. The employer may then require the employee to give back any items that still exist for which the employer provided reimbursement.
Deductions may ...

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