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No FLSA Violation for Deducting from Vacation and Sick Leave Payout, Ninth Circuit Holds

Posted Thursday, January 16, 2014 7:28 pm

The United States Court of Appeals for the Ninth Circuit recently upheld a district court finding that withholding amounts owed to cover company credit card balances from departing employees' vacation and sick leave payouts was not improper under wage and hour law.  In concluding that such deductions do not violate the Fair Labor Standards Act, the court noted that this law does not require employers to pay all remaining sick and vacation pay upon termination.  Further, where the evidence showed that the affected employees' hourly wages met applicable minimum wage and overtime requirements, the employer's practice of deducting monies owed in this manner did not constitute a violation of applicable overtime and minimum wage requirements.  Ward v. Costco Wholesale Corp.

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