Can employer deduct from my pay for a faulty credit card machine?

UPDATED: Jul 24, 2011

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Can employer deduct from my pay for a faulty credit card machine?

As waiter I was recently asked to pay out-of-pocket (ie that nights tips) because the credit card reader did not record the transaction, even though it printed a receipt and was signed by the customer. I have also been asked to pay for a ringing up the wrong total on a receipt.

Asked on July 24, 2011 Indiana


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

First of all, tips are considered to be a form of employee wages and compensation (just ask the IRS). And the general rule is that in a case such as this, wage deductions are not legal. An employer cannot unilaterally take the money out of an employee's pay to offset losses or damage costs. That is unless there is existing company policy to the contrary or a union/employment contract that allows for this; you such a deduction involves some form of workplace discrimination (none of which you indicated).

Note: An employee in an "at will" work arrangement can be fired for no reason or any reason whatsoever. So you may just want to work something our with your employer.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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