Massachusetts Employers Should Rethink Deduction Policies

Employers in Massachusetts are now faced with additional restrictions regarding paycheck deductions. In the past, it wasn’t unusual for companies to recoup losses caused by employees by simply taking the money out of their wages. The amounts could be as significant as thousands of dollars in damage to a company vehicle or as minor as losing a $50 company issued pager. This kind of unilateral action won’t be permitted anymore since a Supreme Judicial Court decision in a recent case has deemed that few deductions fall into the category of “valid set-offs”. This means employees may successfully sue for unlawfully withheld wages if a company tries to reimburse itself for a loss incurred by a worker.

What If an Employee Signs a Consent Form?

It’s pretty common for workers to sign a ‘receipt of company equipment’ form during onboarding or at a later time when they are issued items needed to do their job. However, the Court has made it clear that such agreements are often not legally valid. A policy that singles out some employees for punishment with wage reduction in specific circumstances is considered a “special contract” and is prohibited by state labor laws. This type of agreement also amounts to an employee signing away rights to due process. Such policies typically give the employer the ability to decide liability and the amount of damages that will be recouped without giving the worker any recourse to explain their side or dispute the decision. There are still some cases in which set-offs are legal – you can read more about those at

How This Change Impacts New Hire Onboarding

First, HR will have to review all policies regarding company issued equipment and property damage to make sure workers are not being asked to sign documents that will be invalidated in court. Second, employers will have to determine if they really want to issue expensive equipment unless absolutely necessary. This could impact new hire provisioning decisions. Third, they will want to look at acculturation onboarding to find ways of increasing emphasis on responsibility and avoiding costly workplace errors that can lead to damage or loss of company property. Increasing safety and skills training might be required. Universal Onboarding, Staff Service Request, and the Acculturation Portal from Emerald Software offer employers the tools required to implement new decisions in all of these areas of onboarding.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s