Is it legal for an employer to not file an insurance claim for theft and charge the employee’s on duty?

I’m not sure if my employer has insurance against theft but he charges us the employee’s when a customer steals. Wouldn’t it be neglectful for the employer to not have insurance for that if he has had a few of these instances in the past year alone? Is it fair to charge the employee for someone running out?

Asked on June 17, 2017 under Employment Labor Law, Arizona


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

Answered 3 years ago | Contributor

First of all, there is no legal requirement that a business carry insurance that covers theft. Even if it does have such insurance there is no requirement that it be used. Finally, for incidents involving small sums, the deductible most likley wouldn't be met if the business did file such a claim. As for charging employees for customer theft, this is legal in many states. In AZ, an employer may deduct wages from an employee’s paycheck but only with the employee's written consent and only for the following: cash shortages; breakage, damage, or loss of the employer’s property; dishonored or returned checks. Further, in accordance with federal law, an employer may not make deductions from a worker's paycheck if it would cause them to earn less than federal minimum wage.

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