Human Resources

H.R. Questions: Can we charge our employee for damaged equipment in California?

Hey Compliance Warriors and HR Bosses!


In CA employers are not normally allowed to charge employees for broken equipment.


Read #2 here https://www.dir.ca.gov/dlse/faq_deductions.htm


So, that covers a deduction. But, if you decide to require payment for the equipment outside of a deduction, the employee refuses and then you terminate them, you could also face a claim of wrongful termination.


CA considers non-malicious damages to business equipment to be the cost of doing business and frowns upon charging employees for such loss. This is why deductions are not allowed.


If you have a signed agreement that repayment for lost or damaged property will be required BEFORE the loss happened, you may have a case to pursue payment outside of a deduction. Even then, this will be a tough sell if the employee refuses to pay and you go to small claims court.


I hope this helps!


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Lisa Smith, SPHR, SHRM – SCP
Certified EEO Investigator (EEOC)
Lead Support and Content Chief – HelpDeskforHR.com
“You cannot be audit-proof, but you can Be Audit-Secure.”

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