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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
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Experience:  Significant experience in all areas of employment law.
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Can I deduct from an employees wages for damage to equipment

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Can I deduct from an employee's wages for damage to equipment caused by gross negligence
Good morning and thank you for entrusting me to assist you. My name is XXXXX XXXXX I will do everything I can to answer your question.

California's Industrial Welfare Commission Wage Orders do contain an exception to the general rule prohibiting deductions from wages in circumstances where an employee's "gross negligence" resulted in loss to the employer. However, given that courts zelously protect an employee's right to earned wages, and given that the Wage Commission Orders are not "law" (just adminsitrative guidelines), I strongly advise employers in my private practice to pay the wages in full and then, if necessary, bring a small claims action against the employee for negligence.

To deduct from an employee's wages under these circumstances is to invite a lawsuit. "Gross negligence" can be largely subjective, and the burden of proof is on the employer to prove that gross negligence actually occurred. Even if the deduction is ultimately found by a court to be lawful, at what cost are you willing to defend that position? If you are sued, it may cost thousands of dollars to get the claim dismissed, and for the reasons noted above, there is no certainty that the litigation will even resolve in your favor.

To reiterate, the IWC Orders do permit deductions for gross negligence, but to do so is generally not advisable because the IWC orders are not binding and courts zelaously protect an employee's right to earned wages. Even if such deduction is lawful under the circumstances, you risk a costly legal battle which it is in your interest to avoid. The better option is to fire the employee and/or file a small claims action against them for the amount of the damage.

Please do not hesitate to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further.

If you do not require any further assistance, please be so kind as to provide a positive rating of my service so that I may receive credit for assisting you. Very best wishes and kindest regards.
Customer: replied 2 years ago.

Does your advice apply across the board or just in California?


Thank you for your reply. As this question had been classified into the CA Employment category, I was answering on the basis of those laws. However, the laws in all other states are similarly protective of an employee's right to their earned wages (this protection is derivative of federal law, which applies to all U.S. states) and so the same principles and guidelines absolutely apply.

Please let me know if I can provide any further clarification. It would be my sincere pleasure to do so if necessary.

Patrick, Esq. and other California Employment Law Specialists are ready to help you

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