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If an employee damages company assets given to them (laptop, mobile etc) should the cost be borne by the company? 

Jeff Andrews's Profile


Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

Are you in CA?

Damages Due to Negligence

An employer cannot deduct from the employee's check amounts for damages caused by the employee's negligence.

Damages Due to Gross Negligence, Willful Misconduct, and Dishonesty

The California Division of Labor Standards Enforcement has previously taken the position that deductions can occur for gross negligence, willful misconduct, and dishonesty. That position, though, is in doubt as on February 24, 2003, the DLSE admitted in an opinion letter that the authority for an employer to deduct for damages in these circumstances is doubtful.

However, in Kerr's Catering Service v. Dept. of Industrial Relations (1962) 57 Cal.2d 319, the court upheld section 8 of Order No. 5-57 of the Industrial Welfare Commission (8 Cal. Admin. Code, § 11380), which provided: "No employer shall make any deduction from the wage of an employee for any cash shortage, breakage, or loss of equipment, notwithstanding any contract or arrangement to the contrary, unless it can be shown that the shortage, breakage, or loss is caused by a dishonest or wilful act, or by the culpable negligence of the employee."

Damages Due to Negligence

If an employer believes that the employee owes them money, the best practice may be to file a small claims or other court proceeding to recover the amount, instead of deducting the amount from an employee's pay. If the employer is incorrect about the amount owed, or incorrect that there was gross negligence, willful misconduct, or dishonesty, the employer may owe the employee significant penalties for failing to pay all wages in a timely manner.

Topic Expert
Keith Perry
Title: Director of Global Accounting
Company: Agrinos, Inc.
(Director of Global Accounting, Agrinos, Inc.) |

Regarding the "should" question.
Gross negligince (or culpable negligence), probably.
Willful misconduct, definitely.
Simple negligence...I've never held an employee to this standard. Basically, if I ask them to take a $4,000 laptop home to work on it, and they (for real examples) drop it off the side of a ferry, leave it in a cab in Kuala Lumpur, or simply dump a super big gulp into the back of it....yeah.* Totally negligent. However there is a reason why the company pays for the laptop, etc.

If it is clear that they are acting with gross negligence (using it to hold up a BBQ, for example), then they *should* pay.

My metric is: if another employee could see themselves making the same dumb mistake that destroyed the property, and would see it as a *mistake*, you shouldn't make them pay. You might use it as a learning moment, and remove priveldges that go with the item (bonus pay for working on expensive equipment, free phone that they use for personal stuff on the weekend, laptop that lets them go home early) but that'd be the extent of it.
If another employee would say "that was incredibly stupid / reckless / worthy of termination", then absolutely make them pay.

That being CA never deduct from pay without a court order. Tom's final paragraph is critical. If they refuse to pay, you might fire them, sue them, etc...but don't steal their wages. Courts tend to frown on that.

*Third....that was me, and it was someone else's laptop. Ouch.

Atul Kumar Agarwal
Title: CFO
Company: Retail Company
(CFO, Retail Company) |

When a company recruits, it takes in the employee with a certain degree of trust. I would suggest that if willful negligence gets proven, punish the employee else, any such expense would be part of the business.


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