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Q.My employer loaned me $1000 and I signed an agreement saying he could deduct $100 a week from my paycheck until the loan was paid off. When I quit, my boss deducted the entire $500 balance from my final paycheck. Is this legal?
A.No. Although a California employer may deduct installment payments on a loan from an employee's paycheck if the employee agreed in writing to such an arrangement, an employer cannot take the outstanding balance from a final paycheck even if the employee has given his or her written consent to such a "balloon" payment. When the employment relationship ends, the employer can only deduct the amount of one installment payment from the employee's final paycheck.
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