Don’t Let Your Employer Steal Your Coronavirus Stimulus Payment

The COVID-19 Coronavirus has impacted everyone’s life in one way or another. It should go without saying that our thoughts go out to everyone, especially those who are suffering from the virus or who have lost someone you care about as a result of it. Our best wishes also go out to those of you on the front lines of dealing with this pandemic, from the health care workers to the first responders to the workers stocking the shelves and drivers delivering food and supplies to grocery stores.

Other than the unfathomable loss of life and suffering, there are going to be a host of employment-related issues created or exacerbated by the ongoing pandemic. I will attempt to use this blog to address some of those issues as I hear about them.

The first such issue may apply to those of you fortunate enough to still have a job. Last week, reports emerged of an employer that informed its employees it would be deducting the upcoming government stimulus payments from its workers’ paychecks.

After this scheme was brought to light, the company wisely backtracked from it and apologized. However, based on the experience of working to protect worker’s rights through previous economic downturns, including the recession brought about by the financial crisis in 2008-09, this is unlikely to be an isolated occurrence. Companies of all shapes and sizes are struggling right now and our best goes out to all of them as they attempt to cope with this unprecedented disruption. That said, economic strife is not an excuse to cut corners or violate the law. Federal and State laws have not changed and workers have the same rights and protections now as they did before a single case of COVID-19 was diagnosed in the United States.

Two such laws – the Indiana Wage Payment Statute and the Indiana Wage Claims Statute – prohibit Indiana employers from making deductions from an employee’s paycheck unless the statutes authorize the deduction. Neither law permits an employer to deduct the government stimulus payments (or income tax refunds, for that matter) from an employee’s paycheck. Additionally, an employer who makes such a deduction runs the risk of violating the Fair Labor Standards Act (“FLSA”) by virtue of falling below the minimum wage threshold and/or by failing to pay overtime premiums at the required rate.

If your employer is attempting to reduce your wages as a result of the stimulus payment provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, or if you have any other questions related to issues caused by the Coronavirus pandemic, please do not hesitate to contact an attorney. Even though most of the courts are closed or only handling a skeleton docket, Indiana has deemed law firms an essential business and most lawyers are able to work remotely in order to continue to assist you while not unnecessarily endangering lives. Stay safe everyone.