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October 07, 2010
Mandatory Deductions For Employees in Your Organization

Cheryl Orr and Heather Sager discuss mandatory employee deductions in a BLR webinar entitled ‘Wage Payments: What You Can and Can’t Legally Deduct from Employees’ Pay’. They provide the following information regarding mandatory employee deductions that employers need to apply:.

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Employers are legally bound to withhold the following:

  • Federal Income Tax
  • State & Local Withholdings
  • Federal Insurance Contributions Act (FICA):
    • Social Security
    • Medicare
  • Court Orders

What does an employer do if an order to garnish wages is received for the following:

  • IRS tax levies
  • Child support or Alimony
  • Bankruptcy garnishment
  • Student loan attachments

Court orders can apply to both exempt and non-exempt employees. Wages can be garnished for all of the areas mentioned above. The creditor gets a wage garnishment order that is provided to the employee and the employer. Employees can appear in court and make ask for an exemption from the garnishment of wages due to a number of reasons including living conditions. An administrative fee is not permissible if it makes the employee’s wage go below minimum wage.

Cheryl D. Orr, Esq. is a partner and co-chair of the national Labor and Employment Practice Group at Drinker Biddle & Reath LLP ( She concentrates her practice on defending employers against FLSA collective actions and state and federal wage and hour class actions, and she regularly litigates discrimination, harassment, and unfair competition claims, conducts high-level workplace investigations, develops plans for reductions in force, and offers employer advice and counseling.

Heather M. Sager, Esq. is also a partner in the Labor and Employment Practice Group at Drinker Biddle & Reath LLP. Sager focuses her practice on management-side representation in collective and class actions, with particular experience in wage and hour litigation under state and federal law, including representative claims brought under California Business & Professions Code Section 17200. She also regularly handles single and multi-plaintiff employment litigation in the areas of unfair competition, wrongful discharge, harassment and discrimination before state and federal courts and administrative agencies.

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