Is it legal for my boss to keep money out of my pay to cover loss from customer theft and damage to his store?

UPDATED: Dec 13, 2011

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Is it legal for my boss to keep money out of my pay to cover loss from customer theft and damage to his store?

My boss has a kiosk that sells nothing but Christmas ornaments. I personalize them for the customer. My boss is telling me that he is going to take money from my paycheck to cover customer theft. He says there is over $700 in merchandise that has been stolen, which I find hard to believe and that he is going to take money from the pay of all the employees. Two of them have quit already. He told me that he has done this before and he won the case because he can prove the theft is our fault. There is no way it is our fault when people just walk past and take one.

Asked on December 13, 2011 under Employment Labor Law, Ohio


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

Answered 11 years ago | Contributor

In some states such automatic deductions are legal. However, in others (and as a better course of action) such deductions are only allowable if an employee gives express consent or federal/state law mandates that money be withheld from a paycheck (e.g. back taxes; delinquent child/spousal support payments). However, this does not mean that an employee can't be held liable for such losses, just that their paycheck can't be shorted because of them. The fact is that you owe this money. And, in most employment situations, an employee can be terminated for any reason or no reason at all. So if you don't work out a repayment arrangement with your employer, you could find yourself without a job.

Note:  All of the above presumes that there is no employment/union contract to the contrary or existing company policy does not prohibit this deduction or some form of actionable discrimination is not a factor in your treatment.

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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