Deductions & Expense Reimbursements

Deductions & Expense Reimbursements

An employer can lawfully withhold amounts from an employee’s wages only: (1) when required or authorized by state or federal law (e.g. FICA withholding, payroll taxes, etc.), or (2) when a deduction is expressly authorized in writing by the employee 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.

Some common payroll deductions often made by employers that are unlawful include:

Business Expenses.  An employee is entitled to be reimbursed by his or her employer for all expenses or losses incurred in the direct consequence of the discharge of the employee’s work duties.  In other words, if an employee must spend her own money as part of doing her job, the employer must reimburse the employee for those costs – even if the employee previously agreed to pay for that expense.

Gratuities.  An employer cannot collect, take, or receive any gratuity or part thereof given or left for an employee, or deduct any amount from wages due an employee on account of a gratuity given or left for an employee.  Labor Code Section 351  However, a restaurant may have a policy allowing for tip pooling/sharing among employees who provide direct table service to customers.

Photographs.  If an employer requires a photograph of an applicant or employee, the employer must pay the cost of the photograph.

Bond.  If an employer requires a bond of an applicant or employee, the employer must pay the cost of the bond.

Uniforms.  If an employer requires that an employee wear a uniform, the employer must pay the cost of the uniform.  The term “uniform” includes wearing apparel and accessories of distinctive design and color.

Medical or Physical Examinations.  An employer may not withhold or deduct from the wages of any employee or require any prospective employee or applicant for employment to pay for any pre-employment medical or physical examination taken as a condition of employment, nor may an employer withhold or deduct from the wages of any employee, or require any employee to pay for any medical or physical examination required by any federal or state law or regulation, or local ordinance.

If you believe you have a claim for reimbursement of work related expenses or unlawful deductions, click here.