Employment Law and Selective Service Blog

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Withholding Compensation Can Be A Costly Proposition

Posted by Marc Smith | Apr 21, 2010 | 0 Comments

Our clients frequently seek advice concerning their rights when a departing employee owes money to the company.  This issue presents itself in many different contexts — an employee refuses to return a laptop or other company property, has borrowed money from the company, received tuition assistance or costly training, received a payroll advance or leaves with a negative vacation balance.  Withholding an employee's final paycheck may seem like an easy and painless solution, but the fact is, this is appropriate in Maryland only if the employee has provided prior written authorization for such a deduction.   It is a relatively simple matter to obtain appropriate written authorization, however, most employers don't consider the issue until it is too late.

Unauthorized wage deductions violate Maryland's Wage Payment and Collection Law, which provides for up to treble (triple) damages (i.e. you may end up owing your former employee triple the amount you withheld) plus attorney's fees.   When making loans, providing advances or entrusting expensive equipment to employees, employers should protect themselves with appropriate documentation in the event it becomes necessary to withhold wages.

About the Author

Marc Smith

Marc J. Smith is a Rockville, Maryland employment attorney and a founding member of the law firm formerly known as Smith, Lease & Goldstein, LLC. In 2018, after 18 years managing Smith, Lease & Goldstein, LLC's employment counseling and litigation practice, Marc launched his own boutique practice...

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Representation Of Employers And Employees

The Law Office of Marc J. Smith, LLC is a boutique employment law practice based in downtown Rockville, Maryland near the Montgomery County Circuit and District Courts. The Firm’s practice focuses exclusively in the employment law arena and provides counseling, litigation and a wide range of other employment-related services to employers and employees throughout the State of Maryland, Washington D.C. and other jurisdictions. The Firm also represents individuals who have failed to register with the Selective Service System and who are trying to apply for or maintain federal employment.

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