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Request By:

Henry A. Huettner
3500 First National Bank Tower
Atlanta, Georgia 30383

Opinion

Opinion By: Steven L. Beshear, Attorney General; Martin Glazer, Assistant Attorney General

You seek an opinion concerning an interpretation of KRS 337.060. Ordinarily, this office does not render formal opinions to private entities. But the nature of your inquiry warrants a more formal response.

That statute provides as follows:

"No employer shall withhold from any employe any part of the wage agreed upon. This section shall not make it unlawful for an employer to withhold or divert any portion of an employe's wage when the employer is authorized to do so by local, state or federal law or when a deduction is expressly authorized in writing by the employe to cover insurance premiums, hospital and medical dues, or other deductions not amounting to a rebate or deduction from the standard wage arrived at by collective bargaining or pursuant to wage agreement or statute, nor shall it preclude deductions for union dues where such deductions are authorized by joint wage agreements or collective bargaining contracts negotiated between employers and employes or their representative." (Emphasis supplied.)

You state that federal regulations under the Fair Labor Standards Act (hereafter F.L.S.A.) (federal minimum wage law) (29 CFR Part 531) permit an employer to deduct cash shortages from an employee's wages as long as such deductions do not reduce the employee's wages below the applicable federal minimum wage.

Apparently, it is your view that such federal regulatory authority meets the requirement of KRS 337.060, "is authorized to do so by . . . federal law. "

In our view, the aforesaid quoted section is more limited. We believe that what the Kentucky General Assembly intended is that where federal law authorizes or requires a deduction (for taxes, as an example) the employer may deduct without the employee's prior approval or agreement.

Certainly, the federal F.L.S.A. does not require a deduction for cash shortages. And, that Act does not authorize the deduction. It only provides that such a deduction does not violate the F.L.S.A. if the deduction does not reduce the employee's wages below the federal minimum.

KRS 337.060 must be read in its entirety. The basic proposition is that the employer cannot deduct or withhold the employee's wages. The exceptions include several areas. Exceptions are usually to be construed strictly in statutory construction.

United Brick and Clay Workers of America v. Deena Artware, Inc., 198 F.2d 637, cert. den. 73 S. Ct. 277, 344 U.S. 897, 97 L.Ed 694, reh. den. 73 S. Ct. 346, 344 U.S. 919, 97 L. Ed. 708 (C.A.Ky. 1952).

Section 531.26 of the same federal regulations provides as follows:

"Various Federal, State, and Local legislation requires the payment of wages in cash; prohibits or regulates the issuance of scrip, tokens, credit cards, 'dope checks' or coupons; prevents or restricts payment of wages in services or facilities; controls company stores and commissaries; outlaws 'kickbacks;' restrains assignment and garnishment of wages; and generally governs the calculation of wages and the frequency and manner of paying them. Where such legislation is applicable and does not contravene the requirements of the Act, nothing in the Act, the regulations, or the interpretations announced by the Administrator should be taken to override or nullify the provisions of these laws."

The Commissioner of Labor (of Kentucky) has previously interpreted KRS 337.060 as forbidding unilateral deductions for breakage, or cash shortages, et cetera, unless such deductions are agreed to in writing between the employer and employee prior to their occurrence. To clear the air in interpretation, the Kentucky Department of Labor in 1978 adopted 803 KAR 1:088 (copy enclosed), which regulation spells out the various areas in which a deduction may be allowed without a prior written agreement.

Based upon that contemporaneous construction, and the fact the F.L.S.A. does not prohibit a state from providing stricter minimum wage and other provisions than does the federal law, it is our opinion that the employer cannot deduct for shortages, unless authorized by the provision of 803 KAR 1:088.

To answer your last question, the term "employer" in KRS 337.060 includes all employers in Kentucky, because KRS 337.010(1)(d) defines "Employer" as:

". . . any person, either individual, corporation, partnership, agency or firm who employs an employe and includes any person either individual, corporation, partnership, agency or firm acting directly or indirectly in the interest of an employer in relation to an employe;. . ."

The term is not limited to those covered by the state or federal minimum wage laws.

Disclaimer:
The Sunshine Law Library is not exhaustive and may contain errors from source documents or the import process. Nothing on this website should be taken as legal advice. It is always best to consult with primary sources and appropriate counsel before taking any action.
Type:
Opinion
Lexis Citation:
1981 Ky. AG LEXIS 409
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