Is it illegal for a business owner to spend a portion of his employees payroll? -

for his personal expenses? And if so what is the term for it and where can I find out more info about a situation like this?

I would think it is violating the Fair Labor Standards Act. An employee has a right to be compenstated for work performed or compensatory time off. However, if a business is small, the payroll may not be separated from the business account. He may have some cash flow issues. It is never a good practice to spend business money for personal gain or use personal money for business expenses. Are you certain the employer is spending money out of the payroll account, or is this your perception?