Can an employer pay an employee part or all of their wages in gift cards?

UPDATED: Oct 21, 2011

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Can an employer pay an employee part or all of their wages in gift cards?

Employer gave employee a $10 “birthday gift card” which came from the employees own pay. The money was deducted from the employee’s check, taxed, then given to the employee as a $10 birthday gift card.

Asked on October 21, 2011 under Employment Labor Law, Michigan


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Yes, but with two important limitations:

First and foremost, the employee MUST agree to this--generally in advance, though it is possible to retroactively ratify this. When work is done, the employee is entitled to be paid as per the terms under which he or she had performed the work. If the employee expected to be paid cash, he or she can't be forced to take the gift car as an alternative. So if employees agree to this, it may be legal, but not if they don't want--the employer can't retroactively change the terms under which the worked and force this on them.

Second, all labor laws must still be complied with, which means getting an amount in "cash" (or check or direct deposit) equal at least to minimum wage ($7.75) x the number of hours worked; getting overtime if a  nonexempt employee worked more than 40 hours that week; etc.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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