Typescript - Default parameter Type '{}' is not assignable to

Typescript will not let you assign object literals to a variable of a generic type. While the generic type constraint specifies a minimum contract for the type, the type could conceivably contain required properties (other than those of T) for example. This means that since Typescript can't prove the value is valid for any E it will not let you do the assignment.

In your case the simplest solution is to have a public generic signature and a simpler non generic implementation signature.

export function requiredFields <
  T extends { [propName: string]: string },
  K extends keyof T,
  E extends Partial<T>
>(
  fields: K[],
  values: T,
  startingErrors?: E
):E
export function requiredFields(fields: string[], values: Record<string, string>, startingErrors: Record<string, string> = {}) :Record<string, string> {
  return reduce(
    fields,
    (acc, fieldName) =>
      values[fieldName].length
        ? acc
        : Object.assign({}, acc, { [fieldName]: "Required" }),
    startingErrors
  )
}

declare function reduce<T, U>(arr: T[], a: (acc: U, e: T) => U, i: U): U;