Legal and illegal deductions: Know the difference

Q: AT work, we are required to wear a uniform, which only the employer can provide. The cost of the uniform is deducted from our pay. Is this deduction legal?
A: No, this deduction for employer-mandated uniform is prohibited under California law. If the employer requires its employees to wear uniforms at work, the employer must provide and maintain these uniforms.
A payroll deduction is a subtraction of money from the employee’s paycheck so that the employee receives less than the promised compensation. To protect employees, the law regulates deductions. Employers must adhere to the following:
1) No deductions for uniforms or lost tools – A deduction for uniforms or loss of tools is allowed only if the employer can prove that the employee stole the tools or uniforms, or if there was “culpable negligence,” or if the employee gave advance authorization for deducting the cost of the tools or uniforms if not returned at the termination of employment.
2) No deduction for business losses caused by employee negligence – The law prohibits the employer from using an employee’s wages to shift the losses of the business to the employee. Unless the employee was dishonest or willfully or grossly negligent, losses due to simple negligence, such as cash shortages and breakage or loss of equipment should not be deducted.
Some workers, such as drivers in the transportation industry, are misclassified as independent contractors and deducted for fuel or insurance expenses. If these workers are employees, they should be reimbursed for these expenses.
3) No deduction for workers’ compensation costs – An employer is prohibited from directly or indirectly taking any deduction from an employee’s earnings to cover any part of the costs of worker’s compensation.
4) No right of offset for employee’s debts to employer – However, employee may authorize an employer in writing to withhold some amounts to pay a debt to the employer. If the employee is terminated before the entire debt is paid, the employer may not “accelerate” the balance but instead withhold from the final paycheck only the periodic amount due.
5) No chargebacks for commissions fully earned – However, an employee who receives both wages and sales commissions may agree in writing to a chargeback against commissions advanced by the employer if the sale did not proceed (for example, the customer returns the merchandise).
If the employer is found to have unlawfully made these deductions, the employer is liable to the employee for the amount of the wages withheld, plus any waiting time penalties due.  If an employee has doubts about the legality of a payroll deduction, it would not hurt to ask an experienced employment attorney for legal advice.

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The Law Offices of C. Joe Sayas, Jr. welcomes inquiries about this topic. All inquiries are confidential and at no-cost.  Atty. Sayas’ Law Office is located at 500 N. Brand Blvd. Suite 980, Glendale, CA 91203. You can contact the office at (818) 291-0088 or visit  www.joesayaslaw.com. 

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C. Joe Sayas, Jr., Esq. is trial attorney who has obtained several million dollar recoveries for his clients against employers and insurance companies. He has been selected as a Super Lawyer by the Los Angeles Magazine, featured in the cover of Los Angeles Daily Journal’s Verdicts and Settlements, and is a member of the Million Dollar-Advocates Forum.