Federal Law The federal Fair Labor Standards Act (FLSA) prohibits employers from deducting the cost of any items which are considered primarily for the benefit or convenience of the employer from a non-exempt employee's wages, if the deduction would reduce the employee's earnings below the required minimum wage or overtime pay. Employers are required to keep records regarding all deductions from an employee's wages. Some examples of items which would be considered to be for the benefit or convenience of the employer are tools used in the employee's work, damages to the employer's property by the employee or any other individuals, financial losses due to clients/customers not paying bills, and theft of the employer's property by the employee or other individuals. Deductions from the pay of exempt employees are more complicated due to the fact that there are very specific terms and conditions that must be met in order to claim a particular exemption. For example, in order to qualify for exemption from the FLSA minimum wage and overtime pay protections as a bona fide executive, administrative, or professional employee, an employee generally must meet certain tests regarding his or her job duties and be paid on a salary basis at not less than $455 per week.  Many states also have laws that address when an employer can lawfully withhold amounts from an employee's wages, as well as requirements related to obtaining written authorization prior to making deductions from wages, and providing notice to employees.