Deductions - Can my employer withhold part of my paycheck?
California has strict laws that prevent employers from placing any withholdings on your paycheck. The only deductions on your check should be those required by law (such as taxes).
What can my employer lawfully deduct from my wages?
Under California wage law, your employer can lawfully withhold amounts from your wages only based on the following conditions:
(1) When required or empowered to do so by state or federal law, or
(2) When a deduction is expressly authorized in writing by you to cover insurance premiums, benefit plan contributions or other deductions not amounting to a rebate on the employee's wages, or
(3) When a deduction to cover health, welfare, or pension contributions is expressly authorized by a wage or collective bargaining agreement.
Labor Code Sections 221 and 224.
California courts have restricted employers from deducting money from your wages due to cash shortage, breakage, or loss of equipment. This is specifically regulated by the Industrial Welfare Commission Orders and limited by court decisions. Kerr's Catering v. Department of Industrial Relations (1962) 57 Cal.2d 319.
Each of the California Wage Orders in Section 8 make cash shortage, breakage, or loss of equipment deductions illegal in California.
Getting your wage settlement check - Yes!!!
Wage Garnishments - Are wage garnishments legal in California?
A wage garnishment is a lawful deduction from wages under Labor Code section 224. However, your employer can’t fire you because a garnishment of wages has been threatened or if your wages have been subjected to a garnishment for the payment of one judgment. See Labor Code Section 2929(a).
Why is Bill Turley asked to testify concerning wage law legislation at the California State Senate and the California Assembly?
Because Bill is known as a No B.S. straight-shooter lawyer
Believe it or not, Bill is known for being a no B.S. straight-up lawyer. Besides being known as one of the leading experts on this area of the law in California, one of the reasons why Bill is asked to testify at legislature hearings is because he is known for being straight-forward and blunt. He is known for being no B.S., with no lawyer-talk, no double-talk.
Common illegal wage deductions
The following deductions from your wages are illegal under California wage law:
1. Uniforms. If your employer requires you to wear a uniform, the employer cannot deduct the cost of the uniform or the cleaning of the uniform from your wages.
Labor Code Section 2802.
2. Bond. If your employer requires a bond of you (as an employee or applicant), the employer must pay for the bond. Labor Code Section 401.
3. Photographs. If your employer requires a photograph of you (as an employee or applicant), the employer must pay for the photograph. Labor Code Section 401.
4. Gratuities or tips. Your employer cannot collect, take, or receive any gratuity or part thereof given or left for you, or deduct any amount from wages due you on account of a gratuity given or left for you. Labor Code Section 351 However, tip pooling is allowed among employees who provide direct service to the customer.
5. Medical or Physical Examinations. Your employer may not withhold or deduct from the wages of yours or require you as a prospective employee or applicant for employment to pay for any pre-employment medical or physical examination taken as a condition of employment. Your employer cannot withhold or deduct from the wages of yours, or require you to pay for any medical or physical examination required by any federal or state law or regulation, or local ordinance. Labor Code Section 222.5.
6. Cash shortage, breakage, loss of equipment. Under most circumstances, your employer cannot deduct wages due to cash shortage, breakage, and/or loss of equipment. California Wage Orders, Section 8.
7. Debts, loans. Even if your employer loaned you money and you gave written permission for your employer to deduct the debt or loan from your wages, it is illegal for your employer to deduct the debt or loan from your wages.
8. Salary overpayment/ wages overpayment. An employer cannot make a deduction from your current wages based upon a previous “overpayment” of wages.
9. Business losses: Employers cannot shift general business losses onto their employees and avoid liability by dressing up the deduction as part of the commission's "calculation." For example, paying gas station managers an "incentive bonus" based on the amount of gasoline sold, with a deduction for any cash or merchandise shortages, violates Labor Code Section 221.
Another example is, it is illegal for a store to deduct a pro rata share of commissions previously paid from sales associates of the store based upon the stores generous return policy. In other words, your employer can’t make you an insurer of the company’s products.
My employer overpaid me and now they want their money back - can they withhold my wages to get their money back?
Under California law, if your employer accidentally overpays you, they can’t just start deducting this money from your paycheck, without your permission. Even if you were paid too much and you rightfully owe this money to your employer.
Your employer can ask you to sign a written agreement allowing the deduction from your wages. But they can’t start withholding your wages that they overpaid, without your agreement.
But wait, there’s more
If you are fired, your employer must provide your final paycheck on or before your last day of work. If you have not received your last pay on your last day, you could be owed an additional amount for each day that your employer withholds your final paycheck (up to 30 days). Here is great article on final paycheck laws/ waiting time penalties.
You could be owed up to 30 days of wages for this. This is usually thousands and thousands of dollars in wage penalties under California's strict wage laws.
What can I do if my employer makes an illegal deduction from my paycheck?
Here are you options under California wage law:
1. You can either file a wage claim with the Division of Labor Standards Enforcement (the Labor Commissioner's Office),
2. File an individual lawsuit for your wages,
3. File a class action lawsuit in court against your employer to recover the lost wages, or
4. File a Private Attorney Generals Act (PAGA) wage claim (many times you can combine the class action case and a PAGA case into one lawsuit or separate lawsuits).
What it feels like when you get your wages settlement check in a wage class action case!!!
Why class actions and PAGA cases are usually much better options
We suggest that you should think twice before filing a wage claim with DLSE. This is for several reasons. Let us explain.
At a California legislature hearing that Bill was testifying at, California Labor Commissioner Julie Su was testifying before Bill was called to testify. Labor Commissioner Su spoke at length about the severe underfunding of the Labor Commissioner’s office. She spoke about how the Labor Commissioner has so few attorneys and so many claims.
Because of the Labor Commissioner’s chronic underfunding, it can be difficult for folks to win small wage theft claims with the Labor Commissioner. It really is difficult for the State of California to effectively represent folks with small wage claims under these trying circumstances. In these instances, it usually makes a lot of sense for all the workers to band together with a class action case.
In addition, it is oftentimes very uneconomical to file a single wage claim. These cases are very difficult to bring, it is difficult to find a lawyer that can go toe to toe with the shark company lawyers. This is why class action lawsuits and/or PAGA actions are the only sensible choice.
Need help right now?
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This article isn't legal advice
These discussions and/or examples are not legal advice. All legal situations are different. These testimonials, endorsements, photos and/or discussions do not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter, or your particular case/ situation. Every case is different. There are any number of reasons why class actions are not certified, not won and/or PAGA actions are not successful.
Just because we have gotten great results in so many other unpaid wage cases, doesn't guarantee in particular result in other cases. Including, your wage case. Every case is different.