Deductions from paychecks happen sometimes, and there are legitimate reasons behind why you may lose out on some of your earnings. However, many employees are subjected to unlawful deductions from their pay, such as uniforms, job application health screenings, and photographs for ID badges.
California law provides clear guidelines of when a deduction can be made from an employee’s paycheck. For example, an employer can choose to deduct the cost of uniforms if there was a prior written agreement that uniforms must be returned upon notice of resignation or termination of employment. So, if the worker does not give back the uniforms to the employer within the agreed upon timeframe, that would be a legal basis to deduct these expenses from the worker’s final paycheck.
Another example of unlawful deductions involves tip theft, where the employer takes tips that were left by customers. However, employers are allowed to create a tip pooling policy where all tips earned by a certain group of workers (waiters, waitresses, and bussers, for example), which are collected and distributed equally or according to a formula at the end of the day.
As you can see, these are limited circumstances with specific guidelines, and this is done on purpose to protect workers and ensure that they keep what is rightfully theirs. As someone whose employment rights are being violated, perhaps the following statements resonate with you:
- My employer is taking illegal deductions from my paycheck; what can I do?
- Am I misinformed about these deductions? Are they illegal under California laws?
- Can I refuse these deductions?
- I was fired after I took the matter to HR. Can I sue for failure to provide explanation for deductions from my paycheck by the employer?
Our legal team is ready to assist you with any questions or concerns. Please contact our office today and talk to an illegal paycheck deduction lawyer.
Laws against Paycheck Deductions
California employers are allowed to withhold expenses form a paycheck only if it’s required by federal or California labor laws. Alternatively, the employer may obtain authorization from the employee for deductions to cover insurance premiums, pension deductions, and other payments that were formally authorized by a collective bargaining agreement.
However, employers must adhere to additional restrictions under the Industrial Welfare Commission (IWC). With very few exceptions, employers cannot deduct from a worker’s wages for equipment damage, property loss, and cash shortages. One exception that can be made is situations where the loss resulted from gross negligence or intentional misconduct by the employee. However, employers must have evidence of the employee’s wrongdoing in order to justify the deduction.
Paycheck Deductions for a Loan
Can employers take paycheck deductions if they loaned money to the employee? This is possible if the deductions are authorized by the employee. For instance, you and your employer may have signed off on an agreement where you allow a set amount of money to be deducted from each paycheck up to a certain number of weeks until the loan is paid off.
Please note that in this type of arrangement, the employer cannot demand the outstanding balance in its entirety in the event your employment is terminated. Even if you consented to such a deduction, such an arrangement is against the law in California. That means only one installment payment can come out of the final check, and other arrangements must be made for the remaining balance. Employers are also forbidden from making deductions if they find inaccuracies in their payroll records for past salary advances or commissions from unidentified returns on a sale.
What are My Rights? Can I Sue?
Legal penalties for employers exist under California laws when illegal deductions are made from a worker’s wages. Workers also have other rights that cannot be taken away by the employer, such as rest and meal breaks for non-exempt employees and payment of final wages upon termination of employment.
You have the right to file a claim with your local Division of Labor Standards Enforcement Office (DLSE) if you are having money taken out of your paycheck without legal justification. In some cases, filing a lawsuit may be the right choice, which you can learn more about from one of our attorneys. No matter which road you choose, you must file your claim or lawsuit within the statute of limitations, which is anywhere from 1 to 3 years from the date of violation.
Settlement Values for an Illegal Paycheck Deductions Lawsuit
The average case value of an employment dispute involving wages is around $8,000 to $50,000, which we are basing on statistics from the Department of Labor, as well as our record of settlements on behalf of clients. As expected, the payments are larger in cases of class action lawsuits, meaning there were multiple employees who were subjected to the same employment violation.
How much you can receive from an unlawful paycheck deduction case depends on the damages you are owed and how much you can recover in each of these categories. Possible damages from a lawsuit against your employer are as follows:
- Total sum of all deductions that were taken from your paycheck
- Any unpaid wages, either from employer retaliation after you filed a complaint or wrongful termination from your job
- Any interest accrued on wages, overtime, and other payments that you did not receive
- Civil penalties issued by the State of California if the employer is found to be in violation of wage and hour laws
- Legal fees – filing / court fees, cost of hiring a lawyer
- Punitive damages – awarded by a jury if your employer’s actions constitute gross negligence, fraud, or malice
How Long Does It Take to Settle these Cases?
Labor law violation cases over wages and deductions can take between 3 months to 1 year to resolve. This is only an estimate, so we can’t say for sure how long your own case will take to settle. Much of them timeline has to do with whether you settle your case early on in the process or you proceed to a trial.
Having an employment lawsuit tried in court is extremely rare, since the vast majority of cases are settled after the filing of a formal complaint with the applicable state agency. Or, you and your employer negotiate a settlement after a lawsuit is filed with help from your attorneys, and possibly, a certified mediator. But even with these out-of-court methods, the case resolution process for an illegal paycheck deduction claim may can take over 12 months.
Contact a California Employment Attorney
Our lawyers are here for you 24/7, with decades of experience in wage and hour violation claims. You may feel powerless to fight back against your employer, but we can assure you that the laws are on your side. While navigating the legal system comes with many challenges, please know that we are with you every step of the way.
Aside from effective legal representation, you receive the Zero Fee Guarantee from day one. Legal fees will not be charged upfront, since we work on contingency and only deduct legal fees as a percentage from your settlement. If we don’t obtain payment on your behalf, we make $0 and you walk away without spending a penny.
Reach out to us today and schedule a free consultation to discuss your rights and legal options.
