An employee has resigned and his last day is tomorrow - Californina

He owes the company approximately $338 in vacation time.  It is stated in our ee handbook that if you owe vacation time at the end of your employment that it would be deducted from your final paycheck.  I just heard that we can not deduct the amount the ee owes.  Is this true? 

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  • This has actually been discussed here across a variety of states:
    http://community.blr.com/hr/forums/thread/4324.aspx

    With specific emphasis on California, you are out of luck.  See item 4, in particular:
    http://www.dir.ca.gov/dlse/FAQ_Deductions.htm

  • You know....I jumped in on that discussion and confused everyone including myself, so I took myself out of it, but never really understood. 

    I read item 4 and it scared me....We had a different employee give his notice some time ago, so I typed up a letter stating that we would be deducting the rest of his payment on a tool he purchased from his paycheck.  We deducted it from the paycheck b/f his final paycheck.  I was told that as long as they signed at the time they are given their last paycheck that it was legal.  I also thought that it was legal if they sign something upon leaving for vacation time used, but not accrued----deducted from their paycheck....

  • Item 4 is pretty clear: in California, you can't deduct more than what was in the original agreement even if the employee signs something saying that you can make a baloon payment deduction as the employment relationship ends.

    So, if you make a loan (such as a pay or vacation advance) to an employee in California, then you have to set a pay schedule in a loan agreement and stick to the pay schedule.  Once the employment relationship ends, you have to rely on honesty and integrity or sue the person for any balance owing.

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