California Deductions FAQ’s
Under the California labor law, an employer can lawfully withhold deductions from his employee’s wages only in cases required by federal or state law. This is true when it was authorized by the employee in writing an order to cover benefit plan contributions, insurance premiums, or any other deductions.
Authorized Deductions
Authorized deductions are not a rebate of the wage of the employee. Other situation when an employer can withhold wages from his employee’s is when this amount is covering welfare, health, or pension contributions that are authorized expressly by a collective bargaining or wage agreement.
What is Section 224?
The section 224 of the labor code stipulates that it is legal to make deductions from wages in certain situations. However, employers are not allowed to fire employees for the reason that their wages are the subject of a withholding for judgment fees.
It is specifically regulated that the employer’s ability to withhold amounts form his employee’s wages due to loss of equipment, breakage or cash shortage. This ability is also limited by decisions of the court. Several court decisions have restricted significantly the employer’s ability to collect deductions from his employee’s wages.
Among the common payroll deductions that are unlawful in California but still often made by employers are:
• Gratuities – employers cannot deduct any amount for wages due to an employee on account of gratuities left or given to an employee nor can they take, collect, or receive any gratuity left or given to an employee. However, many restaurants have a policy allowing for tip sharing or pooling among employees who directly service customers.
• Photographs – in the case that an employer asks for a photo of an employee or applicant, the costs of the photograph must be covered by the employer.
• Bonds – employers that require a bond of an employee or applicant should pay the bond’s cost.
• Uniforms – if the employee is required by an employer to wear a uniform, the employer is the one to pay the uniform’s cost.
• Business expenses – employees are entitled to reimbursement for their expenses or losses caused by the discharge or their work duties.
• Physical or medical examinations – employers are not allowed to deduct or withhold from employees’ wages for any pre-employment physical or medical examination required as a condition of employment or by any local ordinance, as well as any state or federal regulation or law.
An employer can deduct lawfully from his employee’s wages under California law if:
• It’s required by state or federal regulations or laws such as income garnishments or taxes.
• It’s authorized expressly by the employee (in writing) to cover medical or hospital dues, insurance premiums.
• It’s authorized by a collective wage or bargaining agreement for covering welfare and health or pension payments.
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