In California, employers may only withhold amounts from wages if state and/or federal laws allow deductions or if the worker expressly authorized the deduction in writing.
Below, we will cover some legal and illegal deductions that employers can make in from your salary. For example, there are limited exceptions to Labor Code 221 that allow employers to deduct costs such as health insurance.
Some of the reasons an employer can deduct from your wages are:
- Under California Industrial Welfare Commission Wage Order 9, a California employer may deduct uniform costs from an employee’s final salary if he or she fails to return the uniform to the company and the employee had a prior agreement in writing to do so.
- Although California employers may not accept tips from employees who serve as wait staff in a restaurant, the establishment may have a tip-sharing policy between employees who provide table service.
Among some of the prohibited deductions are:
- If a California employer requires employee photographs, the employer must pay the cost rather than deducting it from the employee’s wages.
- If an employee is legally required to have a pre-employment medical or physical exam, the employer cannot deduct this cost from the paycheck.
- Deductions from an employee’s salary due to equipment loss, equipment damage, and cash shortages are not allowed. However, the exception to this rule is when the employee’s gross negligence or an intentional dishonest act caused the loss to the employer.
If you suspect that your employer is illegally deducting from your salary, it is important to consult with an experienced wage and hour attorney to find out if you have a valid claim.