Changes from the New Hampshire Department of Labor

A number of changes to the New Hampshire Wage and Hour Law took effect on January 1, 2006. While many employers would have preferred to see more sweeping changes, the amendments do provide a welcome step towards allowing employers to make additional deductions from wages.

New Voluntary Deductions
An employer only may make a deduction from employee wages if the deduction is authorized by law. Effective January 1, 2006 the legislature has expanded the list of authorized deductions. For these new deductions, employers must receive authorization from the employee in writing, and the employer must provide the employee with an itemized accounting of the requested deductions at least once per month. The written agreement must state whether the employer is allowed to deduct any amount from the final wages at termination of employment. Assuming that these requirements are met, employers now may make deductions for the following:

1. Vacation Pay Advances: Employers now may advance vacation time to an employee who has exhausted vacation time and recover any negative balance from employee upon termination of employment.

2. Tuition: Under the amendment, employers may front the cost of tuition for non-required classes and allow employees to pay it back over time through a payroll deduction. The written authorization must include the time the payments will begin and end and the amounts to be deducted.

3. Legitimate Loans: Deductions may be made for installment payments of legitimate loans made by the employer to the employee so long as there is information detailing the time the payments will begin and end and the
amount to be deducted.

4. Accidental Overpayment of Wages: Employers may make deductions for voluntary payments for the recovery of accidental overpayment of wages if the employer and the employee agree to the recovery in writing, and the deduction for overpayment begins one pay period following the date the parties signed the written agreement. The written agreement must specify the date the recovery of the overpayment will begin and end and the amount to be deducted (which cannot be more than twenty percent of the employee’s gross pay in any period).

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