Can I deduct a cash shortage or uniform costs and loss from an employee's
paycheck? This is a common question frequently asked these days. We are also often asked
how to properly deduct the cash shortage from the employee's paycheck. We have made it
clear in the past that our recommendation is that you DO NOT
deduct a cash shortage or uniform costs from your employee's paycheck.
To help clarify matters, the following is a "word for word" quotation from
the California Industrial Welfare Commission.
INDUSTRIAL WELFARE COMMISSION ORDER NO.7-98 REGULATING TO WAGES, HOURS, AND WORKING
CONDITIONS IN THE MERCANTILE INDUSTRY ( ALL TYPES OF SERVICE STATIONS AND AUTOMOTIVE
REPAIR SHOPS)
Article 7. Mercantile Industry (Order No. 7-98) Sec. 11070. Order Regulating
Wages, Hours, and Working Conditions
- CASH SHORTAGE AND BREAKAGE
"No employer shall make any deduction from the wage or require any
reimbursement from an employee for any cash shortage, breakage, or loss of
equipment, unless it can be shown that the shortage, breakage, or loss is
caused by a dishonest or willful act, or by the gross negligence of the
employee."
(A) When uniforms are required by the employer to be worn by the employee as a
condition of employment, such uniforms shall be provided and maintained by the employer.
The term "uniform" includes wearing apparel and accessories of distinctive
design or color.
NOTE: This section shall not apply to protective apparel regulated by the
Occupational Safety and Health Standards Board.
(B) When tools or equipment are required by the employer or are necessary to the
performance of a job, such tools and equipment shall be provided and maintained by the
employer, except that an employee whose wages are at least two (2) times the minimum wage
may be required to provide and maintain hand tools and equipment customarily required by
the trade or craft.
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