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.
Definitions: When an employer charges for lost or damaged equipment, negligence typically refers to a failure to exercise the level of care that a reasonably prudent individual would exercise under the same circumstances. This implies a lack of reasonable caution and care which leads to loss or damage.
The specific legal definition of negligence may vary by jurisdiction as well as the specific facts of the situation. Consulting with a local lawyer can provide information on how negligence is defined in a specific jurisdiction and in a specific case.
Eligibility: In general, the rules regarding employer deductions for lost or damaged equipment apply to different types of employees, however, the specifics may depend on employment contracts and state laws. Some states may have different rules for hourly employees versus salaried employees, or for full-time workers versus part-time workers. It is important to review the laws of the state and the employment contract to understand the specific situation.
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.
State Variations: Employment laws can vary from state to state. 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.
- California: Lost and damaged equipment is generally considered to be a business expense and only allowed as a deduction if the employee was negligent or acted on purpose.
- 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.
- New York: New York does not allow for paycheck deductions for cash register shortages in any situation.
- 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.
These are, of course, not all of the examples in every state. The specific state laws and variations can be complex, so it is important to consult with a local lawyer in the state.
What Should I Do If I Was Wrongly Charged for Broken or Lost Equipment?
Process/Steps: If an employee thinks they were wrongly charged for lost or damaged equipment, their first step should be to review their employment contract as well as company policies that apply to deductions. They should document their situation, which includes the amount deducted, the reason the employer provided for the deduction, and evidence supporting the claim that the deduction was unlawful.
The individual should then consult with an attorney for information on their rights as well as their legal options, which can include filing a complaint with their state’s labor department or pursuing legal action in court.
Evidence/Documents: Evidence and documents that can be helpful in these cases include the employment contract, company policies that govern deductions, records of an individual’s wages and deductions, and any communications with an employer about the deduction. Any other evidence that shows the employee was not responsible or negligent can also help. A lawyer will be able to explain what evidence will be most relevant to the case.
Other Considerations Related to Employer Charging You for Broken or Lost Equipment Claims
Timelines: Typically, there are statutes of limitations that determine how long someone has to file a legal claim about their employer charging them for lost or broken equipment claims. These types of time limits may vary depending on the state and the type of claim.
It is important to reach out to a local lawyer as soon as possible in order to find out the applicable time limits in the jurisdiction as well as to make sure that no deadlines are missed for taking legal action.
Costs/Fees: Whether an employer is able to charge additional fees beyond the cost of equipment will depend on state laws and the specific circumstances. In some states, deductions may only be allowed for the actual cost of the damaged or lost equipment.
Other states may allow additional charges when they are reasonable and related to the incident. Reviewing the laws of the state and reaching out to a local lawyer can provide an individual with clarity on the types of fees that are allowed.
Risks/Penalties: There are potential legal penalties for employers who illegally charge employees that can vary depending on the state as well as the specific violation. The penalties can include fines, legal fees, and back pay. In some situations, an employer can also face civil lawsuits from employees that are seeking damages for unlawful deductions. A lawyer can explain the specific penalties that will apply in a certain jurisdiction.
Why It Is Important to Hire a Lawyer: An employee may be able to resolve their issue on their own if their employer is willing to correct an error that was made after being informed about the unlawful deduction. If the amount is small and the employee is comfortable negotiating with their employer, it may be possible to reach a resolution without legal help.
If however, an employer is not willing to cooperate or the issue is complicated, it is important to consult with a lawyer. An attorney will be able to determine the best evidence to present to support the employee’s claim, ensure all deadlines are met, and protect their client’s rights throughout the process.
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.
