You expect to be paid for your hard work. While you understand that employers must withhold taxes, imagine receiving your paycheck and discovering that your employer took money out of your check to cover the cost of a uniform or other business expense.
If confronted with this situation, many employees would wonder what an employer is allowed to withhold from a paycheck.
California law protects employees
California law provides significant wage and hour protections to employees, including protections against wage deductions. Under California law, an employer is allowed to withhold amounts from a paycheck only under two circumstances.
First, an employer can withhold funds when required or permitted to do so by law, which includes withholding taxes or complying with a court-issued garnishment order.
Second, an employer can withhold funds when expressly authorized in writing by the employee or a collective bargaining agreement to cover insurance or benefit plan contributions.
What employers cannot withhold
Other than the two circumstances described above, any other withholding from an employee’s pay is generally not permitted.
This means, for example, that an employer generally cannot take any part of an employee’s tips or deduct pay based on an employee receiving a tip. An exception to this rule allows restaurants to have a policy allowing tip polling among employees who directly provide table service.
Employers also cannot withhold funds to cover the costs of uniforms, required medical examinations or any other business expense.
In addition, an employer cannot withhold pay to cover a cash shortage or damaged company equipment. A restaurant or retail store also cannot require employees to cover costs of a customer walk out or theft.
What to do if faced with unlawful deduction
If you find yourself facing potentially unlawful deductions from payment, you should consult an experienced employment attorney, who can advise on your rights and any potential avenue for recovery.