Massachusetts Employer Charging for Lost or Damaged Equipment

The federal Fair Labor Standards Act (FLSA) sets federal rules for paycheck deductions for lost or broken equipment. Of course, federal rules apply in all states, including Massachusetts. For most hourly, non-exempt employees, an employer is permitted to make paycheck deductions. However, if in any pay period, a deduction would reduce an employee’s wages to an amount that is below the federal minimum wage, it is prohibited.

This serves as a significant limit on an employer’s ability to make deductions for damaged or lost tools and equipment. While it does not prohibit deductions for damaged or lost tools and equipment, it would limit an employer’s ability to recover any significant amount of money from an hourly employee. A Massachusetts lawyer consultation would help a person understand federal equipment deduction laws.

In the case of salaried, exempt employees, the rule is that any deduction for lost equipment would violate the “salary basis” test that the employer must meet to maintain the exempt status of the salaried, exempt employee. So, for salaried, exempt employees, paycheck deductions for lost or stolen equipment is prohibited by federal law.

Independent contractors would also be expected to provide their own tools and equipment. This would support their classification as independent contractors. Any other arrangement might put into question their status as independent contractors.

In Massachusetts, Can Employers Force Payment To Cover the Loss?

Under the Massachusetts Wage Act, it is illegal for employers to make deductions from an employee’s wages for business-related expenses without the employee’s written consent. Even if the employee has agreed in writing to deductions for tools and equipment, they are prohibited in certain situations. A Massachusetts lawyer would be able to explain the details of Massachusetts employment law.

If it is necessary for an employee to use specific tools and/or equipment in the course of doing their job, the employer must provide them at no charge to the employee. The employer is not allowed to deduct the cost of tools, safety gear or equipment even if only 1 employee uses them exclusively.

Other deductions are prohibited as well in Massachusetts, as follows:

• Uniform Costs: Employers in Massachusetts cannot make employees pay for the cost of their uniforms if those uniforms are specific to the business and are not just ordinary clothing items. For example, an employer must bear the cost of a branded uniform or specialized clothing that an employee would not reasonably wear outside of work. An employer would violate Massachusetts wage laws if they made their employees pay for or reimburse the employer for their branded, specialized uniforms.
  • An employer must absorb the cost of dry-cleaning a uniform, if it must be dry-cleaned or otherwise cleaned in some special manner. If the employee pays for this service, they must be reimbursed by their employer. If an employee is able to wash their uniform as part of their own laundry because it does not require any special handling, their employer does not have to reimburse the employee for any cost they incur in laundering their uniform.
• Business Expenses: Employers are prohibited by Massachusetts law from shifting the costs of doing business onto their employees. This includes making deductions from the paychecks of employees for breaking supplies, tools or equipment. The prohibition also covers making deductions from employees’ paychecks to cover shortages in cash registers or losses caused by customer theft.
  • Massachusetts law considers items such as these to be the standard costs of doing business that employers must absorb. They cannot be passed on to employees through wage deductions.
• Training Costs: In some cases, employers may attempt to deduct wages for mandatory training or certification costs required to do a particular job. Unless the employee agrees in writing, this practice is illegal. Even with written consent, Massachusetts law may limit an employer’s ability to impose such costs on an employee.

Of course, it is important to keep in mind that both Massachusetts and federal law allow certain wage deductions. They are perfectly legal, if they meet certain specific criteria. Generally, employers can make deductions from an employee’s wages for the following:

• Taxes: Federal and Massachusetts laws require employers to withhold federal and state taxes, including income taxes. In addition, they must withhold wages for contributions to the federal Social Security and Medicare systems.
• Employee Benefits: Employers are allowed by law to make deductions from wages for benefits that their employees voluntarily choose to pay for, e.g., health insurance premiums, contributions to retirement savings accounts, such as 401(K) accounts, and other employer-sponsored programs. Of course, the employee must choose to participate and consent to these deductions in writing.
• Court-Ordered Deductions: Deductions ordered by a court for such legal obligations as paying child support, spousal support or wage garnishments allowed by law are legal. State and federal laws make them mandatory, in fact.

These deductions are legal, and they generally benefit the employee or fulfill legitimate legal obligations. There may be limits on the amount of wages that may be deducted in any given pay period, even for legal deductions, so the amount of these deductions may become an issue. And, again, as noted above, if an employer tries to deduct additional costs, they may violate Massachusetts wage laws.

In addition, an employer could conceivably try to make deductions on the basis of some motivation that constitutes employment discrimination. Such an act could violate several federal and state laws, including, for example, Title VII of the Civil Rights Act or the federal Equal Pay Act.

An employer might attempt to make illegal deductions in order to retaliate against an employee. For example, an employee who has made a claim under the Massachusetts workers’ compensation system.

The employer might want to try to make their worker compensate them for the expenses they might incur as a result of an employee’s workers’ compensation claim. Or they might simply want to retaliate against the employee for making a claim. This would be illegal.

So, an employee wants to carefully review their pay stubs when they are paid. If they see deductions that they do not understand, they should ask their employer for an explanation. If the explanation they receive is not satisfactory, they want to talk to a Massachusetts lawyer about it.

What Are Massachusetts State Laws about Charging Employees for Damaged or Lost Property?

If an employer docks an employee’s paycheck illegally, the employee can file a complaint with the Massachusetts Office of the Attorney General. If an employee is uncertain about any policy practiced by their employer, they may contact the Attorney General’s Fair Labor Division Hotline.

When a person completes their complaint form, they should include as much information as they can about their issue. It would be helpful for a person to prepare for filling out the complaint by gathering up their pay stubs, handbooks, or other records related to their issue, so they have these materials with them when they fill out the form.

In addition, the Attorney General’s office recommends that the person who files a complaint keep them available in the event that a staff member from the office asks to see them. A person cannot attach documents to their complaint, and it is not required to have any of these documents in order to file.

Do I Need a Lawyer if My Massachusetts Employer Charges Me for Lost or Damaged Equipment?

If you believe that your employer has made deductions from your paycheck that you do not understand or know to be illegal, you want to talk to a Massachusetts employment law attorney. You want to be sure to keep your pay stubs and bring them to your consultation with your attorney.

Some deductions are allowed but deductions for lost or damaged equipment are not legal in Massachusetts. If you think your employer is docking your pay because some tools or pieces of equipment were lost or damaged, your lawyer should be able to negotiate with your employer to get the money returned. If not, your lawyer can guide you through the process of seeking the relief you deserve from the Massachusetts Attorney General’s office.