When can an employer legally deduct wages from an employee's paycheck?

In New Mexico, employers are generally allowed to make deductions from an employee’s wages, but the deductions must be for authorized purposes and must comply with state and federal wage and hour laws. The most common deductions that an employer can legally make from an employee’s paycheck are those for taxes, insurance premiums, union dues, and other authorized benefits and services. An employer may not, however, deduct wages from an employee’s paycheck for seemingly arbitrary reasons, such as the cost of returned merchandise or damage to company property. Employers must also consider the timing of any deductions, as wages earned must be paid within fifteen days of the end of the pay period in which the wages were earned. Any deductions must be made within that time frame as well, and cannot be made after the employee has received their paycheck. Employers also cannot deduct wages for tipped employees during the same pay period, as that could put them below the minimum wage. Finally, an employer cannot deduct more from an employee’s wages than is allowed by law. Employers in New Mexico can only deduct up to 50% of the employee’s available wages in any given pay period, and can only deduct a maximum of 25% of an employee’s wages per pay period for debt owed. Any deductions that exceed these limits are not considered legal and must not be taken.

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When can an employer legally deduct wages from an employee's paycheck?

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