Illegal Wage Deductions


Employers often try to recoup business expenses by deducting the expenses from employees’ wages. But California law precludes employers from making those type of deductions. In fact, California law only allows employers to deduct money from wages in three situations:

⇒ When state or federal law requires or allows the employer to do so. This situation would include wage garnishments

⇒ If the employee agrees to the deduction in writing to cover insurance premiums, benefit plan contributions or other deductions that do not amount to a rebate on the employee’s wages

⇒ When the deduction covers health, welfare, or pension contributions that are expressly authorized by a collective bargaining agreement


Typical unlawful wage deductions include:

⇒ Deductions to cover another employee’s salary, bonuses, or wages

⇒ Deductions to pay for unintentional cash shortages, breakages, or losses of company equipment or property. For example, if an employee accidentally drops a tray of dishes, takes a bad check, or has a customer walkout without paying a check, the employer cannot deduct the loss from the employee’s paycheck. California views these types of losses as an inevitable consequence of doing business and prohibits employers from recouping these losses from its employees.

⇒ Deductions to cover the cost of uniforms that employees are required to wear

⇒ Deductions to cover the cost of equipment or tools that employees are required to have to perform their job

⇒ Deductions of tips given to employees to offset wages

⇒ Deductions to cover the cost of photographs that employers require applicants or employees to obtain

⇒ Deductions to cover the cost medical or physical examinations required by employer

⇒ Deductions from final paycheck to cover advanced vacation hours or overpaid wages


If you feel unlawful expenses were deducted from your wages, contact us for a free consultation.