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An employer may wish to withhold funds from an employee’s paycheck to cover expenses associated with equipment damaged by the employee or cash shortages in a cash register manned by the employee. But can an employer do so? Yes and no, depending on what jurisdiction the employee is in and whether the employer complied with any legal requirements.
For instance, in California, costs associated with damaged equipment or missing cash are considered to be costs of business to be borne by an employer; an employer may not offset a California employee’s paycheck to cover these expenses except in rare instances where the employer knows the employee acted willfully, dishonestly, or with gross neglect. In other states, offsets are allowed, provided the employee does not receive less than minimum wage for the work performed and provided the employer complies with state-imposed legal requirements, such as giving written notice or obtaining the employee’s written consent. (Some employers obtain this consent in advance by asking new employees to review a handbook that both explains the employer’s policies and that contains a signature page whereby the employee authorizes the employer to make appropriate deductions for equipment breakages or cash shortages.)
To speak with an employment law attorney about an employment law matter, please contact the employment lawyers at Clouse Dunn LLP at info@cdklawyers.com.
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