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Can your employer make you pay for a loss?

| Aug 24, 2020 | Employee Rights |

We all make mistakes on the job. No business can expect their employees to be perfect. If someone makes enough mistakes, of course, they could find themselves out of a job.

What if you made one mistake, and your employer is able to put a price tag on the loss? What if you accidentally break a piece of equipment or merchandise, for example? What if a customer steals something right in front of you because you were distracted by something else? Can your employer make you reimburse them for the cost?

They can’t — at least not here in New Jersey. Laws regarding withholding pay or otherwise requiring employees to pay for breakage, theft by a customer or cash shortage (at a cash register or teller’s cash drawer, for instance) vary by state.

New Jersey labor laws are fairly strict about not letting employers make employees pay for breakage, shortages and other losses. In fact, if an employee fails to return company property when they leave a job, employers aren’t even allowed to deduct the cost of that from their final paycheck. (Taking a company cellphone or even a stapler isn’t a good way to leave a job, though.)

Other states aren’t as generous to employees. In some states, if employees give written authorization (perhaps when they’re signing stacks of paperwork as they start a new job), employers are able to charge them for losses. That’s another reason to read everything you sign even if you think you know what it says.

Federal law doesn’t say much on the topic. However, no employer anywhere in the country can deduct so much from an employee’s pay that it takes them below the federal hourly minimum wage.

While you may be tempted to reimburse your employer what you can when you feel responsible for a loss, you don’t have to. Further, it could set a precedent that other employees aren’t able to follow. It’s preferable to simply strive not to let it happen again.

Not every employer knows the law, and some know it but don’t adhere to it. If you’re being told to pay for something you don’t believe you should or if money has been wrongly deducted from your pay, find out what the law says and what your rights are.

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