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Question: We gave a $5,000 sign-on bonus to a new hire who has been a no-show for numerous days, and we haven’t been able to contact them. Can we withhold and/or deduct from this employee’s final paycheck to recoup some of the sign-on bonus?
Answer: Most likely, no. Unless the employee signed an agreement giving you the right to do so, withholding or deducting wages for hours actually worked constitutes an involuntary deduction in violation of federal law—specifically, the Fair Labor Standards Act (FLSA)—and most (if not all) state wage and hour laws.
If you are considering sign-on bonuses,