California Wage Withholding

A company can lawfully withhold money from a worker’s pay only: (1) whenever required or empowered to do so by state or federal legislation, or (2) when a deduction is expressly authorized in writing by the employee to handle insurance premiums, benefit plan contributions or other deductions not deemed as a rebate on the individual’s pay, or (3) when a deduction to pay for health, welfare, or pension contributions is expressly sanctioned by a wage or collective bargaining arrangement. Despite the fact that a wage garnishment is an authorized deduction from wages under California labor laws, a company cannot terminate an employee because a garnishment of pay has been threatened or if the person’s pay has been subjected to a garnishment for the satisfaction of one judgment.

The ability of a company to deduct money from an individual’s pay because of a cash shortage, breakage, or loss of equipment is expressly regulated by the Industrial Welfare Commission Orders and limited by judicial holdings. Furthermore, there have been several judicial holdings that considerably restrict a company’s power to take an offset against an employee’s pay.

Some typical wage deductions generally made by employers that usually are unlawful include:

Gratuities. An employer cannot collect, take, or receive any gratuity or part thereof given or left for an employee, or deduct any amount from wages due an employee on account of a gratuity given or left for an employee. However, a restaurant may have a policy allowing for tip pooling/sharing among employees who provide direct table service to customers.

Photographs. If an employer requires a photograph of an applicant or employee, the employer must pay the cost of the photograph.

Bond. If an employer requires a bond of an applicant or employee, the employer must pay the cost of the bond.

Uniforms. If an employer requires that an employee wear a uniform, the employer must pay the cost of the uniform.

Business Expenses. An employee is entitled to be reimbursed by his or her employer for all expenses or losses incurred in the direct consequence of the discharge of the employee’s work duties.

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