Deductions from California Employee's Compensation for Errors
California’s Wage Orders generally prohibit employers from taking deductions from a nonexempt employee’s wages as a result of any cash shortage, breakage or loss of equipment.
Given that this is a new employee who made a $60 mistake, it is unlikely that this is permissible. Only where an employer can show that the loss is caused by a dishonest or willful act or by the employee’s gross negligence which does not appear to be the case here.
Updating policies to ensure that they are legally compliant is crucially important because the policy alone is unlawful.In this situation, it would be best to use this mistake as a teaching/counseling opportunity only. It is likely that your policy stating that the Company has the right to deduct non-recoverable losses from the employee is unlawful.
For more information on compensation deductions for errors, please call Lisa Sherman at [email protected] or at (424) 249-3631 for more information.