Handling an Employee's Final Paycheck

Some of the most sought after advice from the NFIB Small Business Legal Center concerns handling the final paycheck for an employee who fails to return company equipment or damages company property

Beth Milito warns small business owners to act carefully before withholding part of an employee's paycheck to recover costs for things like damaged equipment, uniforms, cash drawer shortages or negligence.

"Some states prohibit deductions for these sorts of things, while others allow it if the employee has consented in writing," Milto says.

Milito urges business owners to always check with their payroll provider or state labor department for laws and regulations governing employee withholding.

More legal tips for small business owners are available at NFIB.com/legalNFIB’s Small Business Legal Ease is a web video series with Beth Milito of the NFIB Small Business Legal Center  discussing laws and regulations affecting the right of small business owners to own, operate and grow their businesses.


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Quick facts

Some state prohibit deductions to cover costs for damaged property..
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Consult a payroll provider or state labor department for rules and regulations governing employee deductions.
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Founded in 1943, NFIB is the nation’s leading small business association, with offices in Washington, D.C., and all 50 state capitals.
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