Employment law is an umbrella term that is used to describe a broad range of legal issues associated with employees, employers, and safety conditions in the workplace. Some employment laws may apply to a case that involves employment discrimination, while others can be used to provide guidance when creating company policies or employee handbooks.
Employment law is intended to protect all of those who are a part of the workforce. This may include:
- Establishing protection for employees involved in disputes against a colleague, an employer, or a company;
- Ensuring that businesses do not discriminate against prospective job candidates or current employees throughout the interviewing, hiring, promoting, and/or terminating process;
- Granting specific rights to those who are self-employed, or would be considered independent contractors; and
- Ensuring that volunteers and interns do not suffer from sexual harassment, discrimination, and/or retaliation in the workplace.
It is important to remember that employment laws can vary widely by jurisdiction. Because of this, the rights that one state may protect may not be available as a protection under the laws of another state. Additionally, some issues may be governed by both state and federal employment laws, such as pregnancy leave.
According to federal employment law, your employer may deduct specific losses from your paycheck. You may break or lose a piece of equipment, damage some merchandise, or have your cash drawer come up short. Generally speaking, the only exception to this would be that such deductions cannot drop your pay below the federal minimum wage. What this means is that if you only earn minimum wage, your employer cannot charge you for any losses.
As with much of employment law, laws governing whether your employer can charge you for broken or lost equipment may vary from state to state. There are many states that offer considerably greater protections for employees than compared to the federal law. A number of states require employers to obtain the employees’ written consent before they can legally make a paycheck deduction, while still other states do not allow for such deductions at all.
An example of this would be how the state of California considers lost and damaged equipment to be an ordinary cost of doing business. As such, they will only allow a paycheck deduction if the employee was negligent, or acting on purpose.
Because employee responsibility for lost or damaged property can vary from state to state, as well as from job to job, you may want to consult with a local employment law lawyer if you have any questions regarding the subject.
Can Employers Force Payment to Cover the Loss?
To reiterate, wage deduction laws vary from state to state. Generally speaking, employers are prohibited from making wage or payroll deductions that are considered to be illegal, whether under state or federal law.
Some of the most common examples of illegal payroll deductions generally include, but may not be limited to:
Employment taxes that, by law, must be paid by the employer and not the employee. In general, employers must pay the federal unemployment tax (“FUTA”) as well as state unemployment taxes;
Workers’ compensation premiums, because employers cannot legally shift the cost of workers compensation premiums on to employees. Employers are completely responsible for these premiums;
Deductions that would reduce an employee’s earnings below the minimum wage, as previously mentioned; and
Deductions for nearly all types of personal protective equipment that employees are required to wear under the federal Occupational Safety and Health Act, or “OSHA.”
Permitted deductions at the state level will vary by statute. Some common examples of subjects that vary at the state level include, but may not be limited to:
- Deductions associated with the cost of a uniform that an employee is required to wear while on the job;
- Deductions for cash register shortages. It is important to note that many states allow paycheck deductions for cash register shortages when the employee is clearly at fault for the shortage. Some states, such as California, do not permit such deductions unless the employee was grossly negligent. In New York, an employer cannot deduct an employee’s paycheck for cash register shortages under any circumstances; and
- Employment-related expenses, such as employee training or seminars.
Unlawful deduction of wages is considered to be a type of wage theft. Wage theft refers to the unlawful practice of employers not paying their employees the full amount for the work they have performed.
What Do State Laws Say about Charging Employees for Damaged or Lost Property?
Charging employees for damaged property without explicit proof that the employee damaged the property on purpose is generally considered to be a business expense. To put it simply, you cannot force an employee to pay for damages or lost property; however, you may “respectfully request” that they do. As previously mentioned, OSHA guidelines prevent employers from charging employees for safety and protective gear.
Some specific examples of what state laws say about charging employees for damaged property include:
Alabama: As there are no state specific laws, federal wage laws are adhered to.
Colorado: Employers cannot generally charge employees for damaged property, as they are legally prohibited from making deductions to cover cash shortages, lost or damaged property, bad checks, etc.
Delaware: Employers may not charge employees for their mistakes, and asking them to sign any written agreement allowing them to do so would be a violation of this law.
Florida: As there are no state specific laws, federal wage laws are adhered to.
Georgia: As there are not state specific laws, federal wage laws are adhered to.
Hawaii: Generally speaking, no, Hawaii employers cannot charge employees for damaged property. The exception to this would be any cash box shortages that are in the employee’s sole possession.
Indiana: As there are no state specific laws, federal wage laws are adhered to.
Kansas: Kansas employment laws ban employers from charging employees for damaged property.
Louisiana: Generally speaking, employers cannot charge employees for damaged property. The exception to this would be unless the incident was caused by wilful or negligent actions; or, if the employee is found to be guilty of theft from their employer. Additionally, these fines cannot exceed the actual amount of damage.
Michigan: A Michigan employer can only charge employees for damaged or lost property if the employee agrees in writing.
Nevada: Charging employees for damaged or lost property is only acceptable if the employee agrees, in writing.
Oregon: Employers in Oregon cannot charge employees for mistakes; they may only take disciplinary action, or pursue a legal remedy through the court system.
Pennsylvania: It is unlikely that an employer can charge an employee for damaged property. According to the Pennsylvania Administrative Code, only certain deductions are authorized.
Rhode Island: Rhode Island employers are prohibited from charging employees for damaged property.
Texas: Employers can only charge for damaged property if the employee agrees, in writing.
Wisconsin: Wisconsin employers can only charge employees for damaged property if the employee has agreed, in writing; or, if the employer and union agree that the loss was caused intentionally.
Do I Need a Lawyer?
If your employer is charging you for broken or lost equipment, you should consult with an experienced and local employment law attorney.
Because wage laws vary so widely from state to state, a local lawyer will be best suited to helping you understand your state’s laws, as well as your rights and legal options under those laws. Finally, an employment lawyer will also be able to represent you in court, as needed.
Ken LaMance, Attorney at Law
Senior Editor
Original Author
Jose Rivera, J.D.
Managing Editor
Editor
Last Updated: Nov 2, 2021
