Can my employer require me to pay back a cash handling mistake?

UPDATED: Jun 7, 2011

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Can my employer require me to pay back a cash handling mistake?

I work in a restaurant as a server. In the year that I have been employed I have not had one cash handling mistake nor a reprimand of anything against me. Recently, I made a cash handling mistake and charged my guest’s credit card twice. The guest called back and my restaurant refunded the money owed. Now I (the employee responsible) am required to pay back the full amount refunded to the restaurant because it was my mistake. Is this action legal for them to do?

Asked on June 7, 2011 under Employment Labor Law, Texas


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

Answered 11 years ago | Contributor

It is legal to require an employee to cover a loss only if there is an union/employment contract or stated employment policy indicating that their employer can charge back errors of this kind. However, even if it can require repayment for this type of loss, your employer cannot simply deduct from your paycheck; payroll deductions are subject to a number of limitations.  In such a case, you might need to make repayment by writing a check, etc. to your employer (as opposed to automatic paycheck withholding).

Without a previous agreement requiring repayment ( contract or policy) an employer cannot force the employee to repay money for a loss.  However, in an "at will" employment situation (and most employment arrangements are), an employer can terminate an employee for not making repayment. In fact an at-will employer can fire an employee for any reason or no reason at all.

Bottom line, you just may want to work out a repayment arrangement with your employer to keep the peace and your job.

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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