Some employers deduct the cost of uniforms and other supplies necessary for the job from employees' paychecks. And some deduct costs to cover shortages in an employee's cash register or items an employee breaks or damages on the job.
Not all of these paycheck deductions are legal. Some states don't allow employers to pass certain costs on to employees. Even in states that allow employers to make these types of deductions, employers have to follow certain rules. Here are the basic rules governing paycheck deductions. (This article summarizes the federal rules and gives some information on state variations; to find out what your state allows and prohibits, contact your state department of labor.)
Federal law allows employers to deduct the cost of supplying and maintaining a uniform (for example, having it cleaned and pressed) from an employee's paycheck, as long as the employee's wages after the deduction don't fall below the minimum wage. (The federal minimum wage is $7.25.) If an employee earns the minimum wage, the employer may not require the employee to pay for a uniform, through payroll deductions or otherwise. The deduction also can’t cut into the employee’s overtime compensation.
Some state laws are stricter. For example, some states—including New Jersey—prohibit employers from charging employees or requiring employees to buy a uniform that has a company logo or can't be used as street wear. In California, if uniforms require any cleaning or maintenance beyond the standard washing and drying, the employer must pay for the cost.
The federal law for tools and equipment is the same as for uniforms: Employers may require employees to pay for them, whether through payroll deductions or otherwise, only if the employee's pay after deductions is at least equal to the minimum wage.
And, like the rule for uniforms, state laws may differ. In Oregon, for example, employers may require employees to pay for their work tools as long as the employee earns more than the minimum wage, but payroll deductions for this purpose aren't allowed. In California, employees can't be required to pay for job-related tools; the employer must provide them.
Federal law allows employers to deduct the cost of providing food and lodging to employees, even if those deductions bring the employee's total pay to less than the minimum wage. In fast food restaurants, for example, employers often charge employees the cost of a meal to be eaten during their shift, even though employees typically hold minimum-wage jobs.
Employers may deduct meals and lodging only if those items are customarily provided to employees in the industry and the employee voluntarily accepts them. And, the employer may deduct only the actual reasonable cost of the items provided, not what it would charge customers for the items.
Although most states also allow employers to deduct the cost of meals and lodging provided to employees, there are legal limits. In California, for example, employees must voluntarily agree, in writing, to the deductions. A number of states, including Connecticut and New Hampshire, put a dollar limit on the amount an employer can deduct.
If your cash register drawer comes up short or you damage merchandise, can your employer charge you for the loss? Under federal law, the general rule applies: As long as the employee still earns at least the minimum wage after deductions, there's no rule against charging losses and damage to the employee.
Many states have adopted stricter rules, however. Some states require employers to get the employee's consent, in writing, before they can deduct the cost of broken merchandise or shortages from the employee's paycheck. Some allow these deductions only from an employee who assumes responsibility for the loss.
California doesn't allow these deductions at all, unless the employer can show that the employee acted dishonestly, willfully, or in a grossly negligent manner. California considers ordinary losses and shortages to be part of the cost of doing business, which should legally be borne by the employer, not passed on to employees.
To learn more about rules protecting your paycheck, get Your Rights in the Workplace, by Barbara Kate Repa (Nolo).