Absolutely No! Your employer is not allowed to deduct money from your wages if there is a cash shortage, breakage or loss of company property/equipment due, to a mistake or accident.
By Brad Nakase, Attorney
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No your employer cannot legally deduct any amount from your wages if a cash shortage, breakage or loss of company property/equipment occurs due, to a mistake or accident. According to California law, losses that happen without any fault on the part of the employee or are simply due to negligence are common in businesses and therefore the employer should bear losses as a normal cost of doing business.
For example, if you accidentally drop a tray of dishes accept a check or experience a customer leaving without paying their bill your employer cannot take that loss out of your paycheck.
However there is an exception which allows employers to deduct from an employees wages in case of cash shortages, breakages or equipment losses if they can prove that it was caused by dishonesty or willful acts on the part of the employee or by their negligence. This means that deductions may be made legally only if the employer can demonstrate that the loss occurred due to dishonesty, willfulness or grossly negligent behavior, on behalf of the employee. It is important to note that mere accusations alone do not grant employers with the right to make deductions. You should contact an California employment lawyer in Los Angeles if your employer deducted your wages.
The DLSE has warned that using this deduction mentioned in the IWC regulations might not actually comply with the provisions of the California Labor Code and various court decisions, in California. Moreover the DLSE doesn’t automatically assume that an employee acted dishonestly willfully or with negligence when an employer claims reasons for deducting wages to cover shortages, breakages or property/equipment loss.
According to Labor Code Section 224 it is clearly forbidden to deduct any amount from an employees wages without their written authorization or without being permitted by law. Employers taking matters into their hands face a risk as an objective evaluation is conducted to determine if the loss resulted from dishonesty, willfulness or gross negligence.
If your employer makes such a deduction and it is later found that you were not guilty of any willful act or gross negligence you have the right to recover the withheld wages. Additionally if you no longer work for the employer who made the deduction and it is determined that the deduction was unjustified you may also be eligible to receive waiting time penalties as, per Labor Code Section 203.
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