Is it legal for a company to deduct pay from every single employee because they found out one person is stealing?

UPDATED: Sep 30, 2022

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Is it legal for a company to deduct pay from every single employee because they found out one person is stealing?

I work at a restaurant and their has been money missing from the till randomly and so the owners have been deducting everyone’s paychecks to add up to the amount that was missing, is this lawful? I guarantee it was just one person and everyone is getting punished.

Asked on May 9, 2017 under Employment Labor Law, North Dakota


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

No, it is not even remotely legal: the law is clear that there are no deductions from employee pay, even if the employer believes they owe the employer money, without either employee consent/agreement to the deductions, or a legal order for the deductions (like court or IRS ordered wage garnishment). The employees could look to file a wage complaint with the department of labor or sue (e.g. in small claims court) for the money.
The employer could terminate employees over suspected theft, with no need to prove allegations (employment in this country is "employment at will"), or do anything less than termination, like cutting hours, reducing wages, suspending, etc. If they think they can prove who took the money, they could also sue that person(s) for it, and get it if they can prove their case in court. But they may not unilaterally withhold or deduct from wages.

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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