Ask the Expert: Can You Deduct Speeding Tickets from Employee Wages?

Question: Our employees drive vehicles strictly for work purposes, but we don’t have a policy on such use. After employees received several speeding tickets, we’d like to introduce a policy that would allow management to deduct the cost of tickets from employees’ wages. Are we allowed to start introducing this type of payroll deduction?

Answer: Employers should be wary of implementing payroll deductions that aren’t expressly permitted by federal or state law. Deductions primarily benefiting the employer are likely prohibited by most state laws. A deduction from wages primarily benefits the employer if it’s related to the employer’s cost of doing business. Because a speeding ticket can be considered part of the cost of doing business, employers should be aware that deducting these types of fines from employees’ wages may prove more legal hassle than it’s worth.

As a backstop, the Fair Labor Standards Act (FLSA) lists permissible payroll deductions. Deductions may violate the FLSA if they bring the employee’s hourly pay below the minimum wage or cause an exempt employee’s salary to fail the salary basis test. State laws then require or prohibit certain payroll deductions, typically to protect the interests of employees while restricting benefits to the employer.

While employers should strongly consider obtaining written consent from employees before making deductions from wages, that may still be insufficient to avoid wage and hour risks. Even if voluntary written consent were the only condition, because deductions for speeding tickets aren’t considered an employee loan or benefit, there’s still a risk of liability in making such deductions.

This isn’t to say employers are prohibited from holding employees accountable for a speeding ticket obtained while operating a company vehicle. Rather than introduce a payroll deduction policy, employers should consider updating their handbooks to implement rules and disciplinary consequences regarding the use of company vehicles. Once appropriate policies and guidelines are in place, management should ensure employees are held accountable through discipline by enforcing the requirements fairly and consistently across the board.

Jamie Repasky is a labor and employment attorney in Porter Wright’s Columbus, Ohio, office. She can be reached at jrepasky@porterwright.com.

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