Kentucky: Employee Wage Deduction Requirements
The short answer
Kentucky generally forbids withholding any part of the agreed wage unless local, state, or federal law authorizes it or the employee expressly authorizes the deduction in writing for insurance, medical dues, or another purpose that does not rebate the agreed or statutory wage. Even a writing cannot authorize fines, common-till shortages, breakage, or certain bad-check losses. Losses from faulty work, property, customer credit, or nonpayment remain prohibited unless tied to the employee's willful or intentional disregard of the employer's interest, and the general law-or-written-authorization rule still applies.
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This is the general rule in Kentucky. Ezel applies current Kentucky law to your specific facts and answers with citations to the statutes.
| Governing law and coverage | Kentucky Wages and Hours Act, KRS 337.060 (withholding baseline and prohibited deductions), 337.070 (deduction statement for employers with 10+ employees), 337.385 (private/commissioner recovery and 3-year period), and 337.990(4), (6) (civil penalties). Section 337.060 applies to an 'employer' withholding an employee's agreed wage |
|---|---|
| Deductions required or authorized by law | Permitted when the employer is authorized by local, state, or federal law (§ 337.060(1)); taxes, support, and garnishment operate under those separate regimes. Union-dues deductions may rest on a qualifying joint wage agreement or collective-bargaining contract, but post-Jan. 9, 2017 agreements still require the employee's written consent (§ 337.060(1)) |
| Voluntary authorization requirements | The employee must 'expressly' authorize the deduction in writing (§ 337.060(1)). The statute names no electronic-signature, amount, percentage, frequency, duration, or advance-day formula; the authorization must cover insurance premiums, hospital/medical dues, or another deduction that is not a rebate or deduction from the standard wage set by collective bargaining, wage agreement, or statute |
| Employee-benefit and purchase deductions | Written authorization may cover insurance premiums, hospital and medical dues, and other deductions that do not rebate or reduce the standard wage (§ 337.060(1)); union dues also require a qualifying labor agreement and, for agreements entered into, opted into, renewed, or extended on or after Jan. 9, 2017, employee written consent. The list is illustrative, not a closed catalog |
| Employer losses, shortages, and property | Always prohibited: fines, common-till/cash-box/register shortages used by 2+ people, breakage, and dishonored-check losses where the employee had discretion to accept or reject the check (§ 337.060(2)(a)-(d)). Faulty-work, lost/stolen-property, property-damage, customer-credit, and customer-nonpayment losses are prohibited when not attributable to the employee's willful or intentional disregard of the employer's interest (§ 337.060(2)(e)); if that fault threshold is met, § 337.060(1)'s law-or-express-written-authorization baseline still applies |
| Overpayments, advances, and employer loans | No special overpayment, wage-advance, or employer-loan recovery route in § 337.060. Unless another law authorizes recovery, the employer needs the employee's express written authorization, and the deduction may not amount to a rebate or reduction from the standard wage (§ 337.060(1)) |
| Notice, revocation, records, and wage floor | No general advance-notice, revocation, or authorization-retention rule. Employers with 10+ employees that make deductions must give a paper or electronic statement listing each deduction's amount and general purpose; an electronic statement requires employee access to a computer and printer (§ 337.070). The written-authorization route cannot be used for a rebate or deduction from the standard wage fixed by collective bargaining, wage agreement, or statute (§ 337.060(1)) |
| Enforcement and remedies | Private action for unpaid wages, an equal amount as liquidated damages (court may reduce for good faith), costs, and reasonable attorney's fees; the commissioner may take a written assignment and sue, and the default limitations period is 3 years (§ 337.385). A § 337.060 violation also carries a $100-$1,000 cabinet penalty and liability to the employee for the amount withheld plus 10% annual interest; violating § 337.070 carries $100-$1,000 per offense, with each continuing day separate (§ 337.990(4), (6)) |
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Requirements one by one
Legal authority or express written authorization
KRS 337.060 starts with a broad rule: an employer may not withhold any part of
the wage agreed upon. A deduction is permitted when local, state, or federal
law authorizes it, or when the employee expressly authorizes it in writing for
insurance premiums, hospital or medical dues, or another purpose that does not
rebate or reduce the standard wage fixed by collective bargaining, wage
agreement, or statute.
The section does not specify an electronic-signature method, a minimum number
of advance days, or required fields for amount, percentage, frequency, and
duration. But "expressly authorized in writing" requires more than silence or
an unwritten understanding.
Union dues have a related route through a qualifying joint wage agreement or
collective-bargaining contract. For an agreement entered into, opted into,
renewed, or extended on or after January 9, 2017, the employee's written
consent is still required.
Some losses cannot be deducted even with a writing
Subsection (2) begins "Notwithstanding" the authorization rule and then lists
deductions an employer may not take. Fines, breakage, and a cash shortage from
a till, cash box, or register used by two or more people are prohibited. So is
a dishonored-check loss when the employee had discretion to accept or reject
the check.
The last category has a fault line. Deductions for defective or faulty work,
lost or stolen property, property damage, customer-credit default, or customer
nonpayment are prohibited when the loss is not attributable to the employee's
willful or intentional disregard of the employer's interest. If that threshold
is met, subsection (2)(e) no longer supplies the prohibition, but subsection
(1)'s law-or-express-written-authorization baseline still remains.
Overpayments, wage advances, and employer loans get no separate recovery
schedule. Unless another law authorizes the withholding, they remain under the
express-written-authorization rule.
Statements and remedies
An employer with ten or more employees that makes deductions must give each
employee a paper or electronic statement stating every deduction's amount and
general purpose. If the statement is electronic, the employer must provide
access to a computer and printer for review and printing (KRS 337.070).
An affected employee may sue for unpaid wages, an equal amount as liquidated
damages, costs, and reasonable attorney's fees under KRS 337.385; a court may
reduce liquidated damages for a proven good-faith, reasonable-ground defense.
The commissioner may take an assignment and sue, and the default limitations
period is three years. Separately, KRS 337.990(4) imposes a $100-to-$1,000
penalty and makes the employer liable for the amount withheld plus 10% annual
interest.
What trips people up
Written authorization does not override the prohibited list. Subsection
(2) applies notwithstanding subsection (1). A blanket signed form therefore
does not permit a fine, shared-till shortage, breakage, or another loss the
prohibited list covers.
The willful-or-intentional exception belongs only to subsection (2)(e). It
qualifies faulty work, property, customer-credit, and customer-nonpayment
losses. The statute does not attach that exception to fines, breakage, shared-
till shortages, or the dishonored-check category.
Proof of fault is not the whole deduction process. Even if an (e)-type loss
is attributable to willful or intentional disregard, the employer still needs
authority under law or the employee's express written authorization under
subsection (1).
Common questions
Can an employer deduct a cash-register shortage?
Not from a common till, cash box, or register used by two or more people. KRS
337.060(2)(b) prohibits that deduction notwithstanding the general written-
authorization route.
Can an employer deduct for damaged property?
Not when the loss is not attributable to the employee's willful or intentional
disregard of the employer's interest. When that fault threshold is met, the
employer must still satisfy § 337.060(1) through legal authority or express
written authorization.
Does the pay statement have to explain deductions?
For an employer with ten or more employees, yes. KRS 337.070 requires the
amount and general purpose of every deduction on a paper or electronic
statement, plus computer-and-printer access when the statement is electronic.
What can an employee recover?
KRS 337.385 provides unpaid wages, potentially an equal amount as liquidated
damages, costs, and reasonable attorney's fees, with a three-year default claim
period. KRS 337.990(4) separately provides the amount withheld plus 10% annual
interest and a $100-to-$1,000 civil penalty.
Statutes and sources
- KRS 337.060(1)-(2). Legal-authority and express-written-authorization
routes, benefit and union-dues language, and the prohibited-loss list.
Official text
(accessed July 13, 2026). - KRS 337.070. Deduction statement for employers with ten or more employees,
including electronic-statement computer and printer access. Official text
(accessed July 13, 2026). - KRS 337.385(1)-(2), (4)-(5). Unpaid wages, liquidated damages, costs,
attorney's fees, commissioner assignments, and the three-year default period.
Official text
(accessed July 13, 2026). - KRS 337.990(4), (6). Penalties, withheld wages plus 10% annual interest,
and statement violations. Official text
(accessed July 13, 2026).
Source links
Every statute quoted above, linked, with the date we checked it.
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