Is it legal for my company to deduct lost or stolen inventory from my paycheck?

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Is it legal for my company to deduct lost or stolen inventory from my paycheck?

I am a comission only W2 employee. I sell a 24-month contract service. Lost or stolen inventory is taken out of my paycheck at the retail cost. How can they do that? If this is illigal, what steps do i need to take to recover my losses. Also, if a customer cancels their service within the first 180 day my compay charges me the equipment loss.

Asked on May 7, 2012 under Employment Labor Law, Kentucky

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

1) A company can attempt to recover money from an employee for lost or stolen goods (if it believes the employee is at fault), but it may not simply withhold or deduct money from the employee's paycheck without his or her consent or agreement. If the company feels you should pay but you refuse, their option to get the money would be to sue you for it; in the lawsuit, they have to prove that you were at-fault (a deliberate bad act, or negligence/carelessness) in causing the loss.

2) The company could fire you if it feels you have cost it money, of course.

3) A company may require employees to repay lost revenues or other costs/losses, but this must be "agreed to" by the employees  in advance. As a practical matter, that means there must be notice that this is the policy, after which the employees continue working there, which would constitute agreement to the policy. However, even in this case, the employee must also specifically agree to allow the money to be taken from his or her pay, or else the company cannot simply take it from his or her paycheck.


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