The California Labor Code is clear on the subject – an employee must be paid “all wages” they are owed when their employment ends. But what if you’re a waitress and someone walks out on their check? What if you broke dishes? In short, it’s generally illegal for an employer to deduct anything that doesn’t fit into a short list of categories.
According to the Department of Industrial Relations, an employer can only deduct the following things from an employees check:
1. anything required or authorized by state or federal law
2. something the employee authorized, such as the employee’s share of insurance premiums, a benefit plan contribution
3. deductions authorized by a union agreement
If a cash register comes up short, or equipment is damages, it is generally considered a cost of doing business – not something an employee has to cover. In other words, it should be the restaurant owner’s problem if someone skips out on their check or a few dishes get broken. More specifics depend on the kind of business the employee is covered by in the Industrial Welfare Commission Orders and court case3s. For example, Barnhill v. Sanders (1981) 125 Cal.App. 3d 1, states that a balloon payment to repay an employee’s debt to an employer is an unlawful deduction even when the employee signed something agreeing to that. Another says it is unlawful to deduct current payroll for past salary advances when those advances were a mistake. In the case of commissions on sales, it is helpful if the employee has something in writing which states when those commissions were “earned.”