Deduct from Final Pay?

Kymm · April 2006

Wondering what you all may do out there.. if anyone does something close to this? When we hire someone, they go thru an extensive physical, 40 hour Training (outside source), buy boots for them as well as uniforms. This all comes to probably close to $1000.00. We haven't done so in the past, but would like to perhaps start deducting this cost from an employee's final paycheck IF the "voluntarily" quit their employment within a certain amount of time (possibly 6 months?). Can we do this, IF we have them sign something to that affect at their date of hire? Then I'm wondering... for our CA employees, I seem to remember that we could do this, however, they would have to sign something with the exact $ amount at the actual time we are wanting to deduct it (at the time of their resignation)... thoughts/advice on this??

HR in CA · April 2006

First off, I share your pain!

Any deductions made from an employee's check, must not drop the employee below earning the current minimum wage.

We have been advised not to deduct for any of the items you list by our attorney. He refers to it as the cost of doing business. The only time our attorney says we can deduct is by being able to prove gross negligence on the part of the employee.

We have had employee's sign a promissory note for some expensive training, should they leave within two years they would be required to pay it back, but we would have to take them to small claims court, not take it from their final check. We have yet to have to take a former employee to small claims court.

When employees have borrowed money from us, then quit we have been able to collect from their final check if they sign an agreement when the loan was made and on the employee's final day allowing for the deduction. Again we had to ensure even with this deduction, the employee earns at least minimum wage for the hours he/she worked.

Paul in Cannon Beach · April 2006

Kymm,

Here is a link to a pdf file that discusses California pay deductions: [url]http://www.dir.ca.gov/dlse/payrolldeductions.pdf[/url]

The answer is no, you can't. If you read this page you will even see that it explicitly states that you can't deduct for uniforms or medical exams.

I think a good rule of thumb is don't deduct from paychecks unless its something that benefits the employee, you have written authorization, and it doesn't violate minimum wage. Even then, I would proceed cautiously.

LarryC · April 2006

Kymm, to further add to your pain that the other posters here have inflicted, the uniforms and boots you mention just may be considered safety items and cannot be deducted for that reason. I think your stuck.

swynia · April 2006

I have also gone down that road. We have our employees in uniforms and more times than not, when they leave they seem to 'forget' to bring in their uniforms. There is nothing that we can do. We require them to wear the uniforms, so it is the cost of doing buiness.

pork1 · April 2006

[font size="1" color="#FF0000"]LAST EDITED ON 04-21-06 AT 12:52PM (CST)[/font][br][br]yes, it is a cost of doing business and a tax write off at the year's end but someone must keep account of those losses and report it to the accounting department. We have that written into our letter of offer. Additionally, it is provided to the employee as a pay advance and you set that up from the start as an accounts receivable. Since it is an "advance of pay not yet earned" you can take every last penny of the final pay check, because, they have been paid an excess amount of money and it is due back to the company. If you set it up as a loan and not as "pay advance" your company is acting like a bank and we are not authorized to do that unless, we are a bank! You can forgive the pay advance if you so choose to do so. If the employee is a reliable employee, we will forgive the debt owed and report it as a cost of doing business.

PORK

Paul in Cannon Beach · April 2006

"Since it is an "advance of pay not yet earned" you can take every last penny of the final pay check, because, they have been paid an excess amount of money and it is due back to the company."

I am not sure what you are talking about, Pork. Are you still referring to uniforms or loans made to an employee?

Deduct from Final Pay?

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