Q: Is it legal to charge a $12.50 "Processing Fee" per paycheck? For the year $275 has been deducted from my paycheck.
I am an hourly employee in California and my paycheck is usually direct deposit so I only check to make sure that the hours are correct. I got a random bonus check that the company sent and I was super grateful for the extra cash but took a minute to look at all the deductions more closely and noticed a line listed as "Processing Fee" for $12.50 and then the year to date was $275. I was under the impression that it was illegal for a company to charge an hourly employee for business expenses? And even though this is not a large amount it offends me that I am being charged for being paid what I worked for. Is this legal? Do I have any standing for recourse?
A:
No. An employer may not charge you a "processing fee" to get your check, unless you authorized it in writing. According to the California Division of Labor Standards Enforcement, "An employer can lawfully withhold amounts from an employee's wages only: (1) when required or empowered to do so by state or federal law, or (2) when a deduction is expressly authorized in writing by the employee to cover insurance premiums, benefit plan contributions or other deductions not amounting to a rebate on the employee's wages, or (3) when a deduction to cover health, welfare, or pension contributions is expressly authorized by a wage or collective bargaining agreement. Labor Code Sections 221 and 224." Employer cannot make you pay for the privilege of receiving your paycheck.
You should speak with an employment lawyer. Most offer free consultations. If the employer is doing this illegal practice to you, the employer is likely also stealing from other employees. There may be grounds for a class action and/or PAGA claim.
Neil Pedersen agrees with this answer
A:
Your employer is violating the law. It is unlawful for an employer to charge an overhead charge as part of the payroll. You have the right to stop this conduct, and to seek reimbursement of the money you have already paid for the processing charge. If this is happening to many employees at the company, a larger collective action might be appropriate to stop the conduct and seek reimbursement for all of the aggrieved employees.
Therefore it would be wise for you to locate and consult with an experienced employment law attorney as soon as possible to explore your facts and determine your options. I would suggest you look either on this site, or go to www.cela.org, the home page for the California Employment Lawyers Association, an organization whose members are dedicated to the representation of employees against their employers.
Most employment attorneys who practice this area of law offer a free or low cost consultation in the beginning and then, if the matter has merit and value, will usually agree to work on a contingency basis, meaning you can hire an attorney without paying any money until the matter results in a positive outcome for you. Many advance all the costs of the litigation as well. Do not let fear of fees and costs keep you from finding a good attorney.
Good luck to you.
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