View Full Version : dock pay for stealing

04-26-2002, 02:09 AM
We had an employee caught stealing various pieces of aluminum from our manufacturing plant in Louisville,Ky. The approximate value about $500.00. We are thinking about holding some money from his last pay check to pay back whatever is not returned. Can we legally withhold for this reason? Thank you and God Bless


04-29-2002, 02:00 AM
Jeff, although I'm not an attorney, I think that would be a crime of conversion to do what you all are thinking. I would suggest you check with legal counsel prior to doing that. Good luck.


04-29-2002, 03:59 AM
Definately check your state laws. Here is Louisiana, we can't dock the pay for an employee stealing unless there is a conviction.

05-01-2002, 02:22 AM
I agree with the other answers. If the amount withheld reduces the final wages to less than the minimum wage for all hours worked such withholding would be in violation of the FLSA. You definitely need legal counsel advice before doing it.

WOCO Frank
05-07-2002, 03:12 AM
We deal with a lot of employee theft and we routinely use the paycheck to get it back. If the check is worth more than the amount stolen, we give them the paycheck when they bring us a cashier's check for the restitution amount. If the check is less than the amount stolen, we sit on it until the employee calls, then we raise the topic of prosecution.

We have never - absolutely never - been hit with any adverse legal judgment on this.

Incidentally, I have a lockbox full of paychecks still uncollected. One is for over $700, and the employee could get it if he repaid us the $40 he stole (the theft is recorded on videotape). We've sent him two letters to that effect, but he refuses to pay us because he's on probation and he's afraid that paying restitution would eventually surface as an admission of guilt. He'd rather forfeit the $700 than risk having his probation revoked.

05-07-2002, 03:23 AM
In South Carolina, you cannot refuse to pay wages earned for any reason. I would definitely recommend prosecution for theft, though.

05-14-2002, 09:13 AM
If the employer docks pay for stealing, they make themselves judge, jury, and executioner. There is no agreement on the part of the employee and no due process. If the employee agrees to pay restitution, that is a different matter but this will usually be in conjuction with trying to save his or her job. If you fire the employee, unless your state law gives you considerable latitude, be careful. A trip to small claims court to get a judgement may be a better way to go.

Cheryl S SPHR
05-15-2002, 01:23 AM
In SD there is a statute that allows employers to withhold for unreturned company property (I don't recall the exact language). Hopefully, you have turned this over to law enforcement. In that case, you may recover your loss through the court system if you cannot withhold from pay.

Don D
05-15-2002, 02:10 AM
I would think that even in South Carolina you can deduct from final paycheck for things like: travel/expense advances not returned, loans from the company with balance remaining, etc with salaried staff. With hourly manufacturing staff, our company also has a policy to deduct for safety shoe purchases and safety glasses paid for by the company if the ee quits within 90 days of hire. We've never been challenged on any of this. I would not recommend trying to deduct for 'suspected theft' even if on video, without prosecution and then would try to recover it through the court system. Just be glad he's gone.

05-15-2002, 05:15 AM
This is an excellent question in that it points out how the FLSA and what some folks consider appropriate do not necessarily match. Per the FLSA, which is a minimum standard and not a maximum for employers, an employer can not, I repeat can not, dock a nonexempt employee for any item that is primarily for the employer's benefit or convenience if the docking will reduce the employee's pay below minimum wage or any overtime pay. This restriction includes theft by the employee of the employer's property. It also includes destruction (or theft) of employer's tools, damage to employer's property, or an act by the employee that causes financial loss to the employer such as if the employee is responsible for a client or customer not paying a bill. This is the minimum set by the FLSA for the employer. Some state laws are even more restrictive on the employer's right to dock for these reasons. That is why I refer to the FLSA as a minimum and not a maximum. As to the comment above about having never yet encountered problems with a practice that is blatantly in violation of FLSA, it sounds like serious trouble only waiting to happen. Furthermore, not only does someone on probation for a felony have the right to be paid like any other employee per the FLSA, aside from the FLSA employer problems can arise if the employer is using the probationary status to deny the employee fair treatment under the law. Some states have specific laws on such behavior and they are not friendly to the person doing it. Of course, the employer engaging in such behavior might take comfort in the fact that 53% of employers in the US are estimated to be in violation of the FLSA in some way. However, the type of behavior referenced on this particular matter is more serious than many of the typical, often accidental, violations. That employer is in serious need of a talk with a lawyer. Incidentally, the practice of withholding employee's paychecks and instead putting those paychecks into a lock box would be a great joke for employment lawyers if it were not apparently true.
Stanley P. Santire, JD

Don D
05-15-2002, 07:17 AM
Far be it from me to contradict or disagree with somebody with J.D. behind his name, and assuming he was addressing me when he mentioned doing something that is "In blatant violation of the FLSA", our practice of recovering company funds spent on safety shoes and safety glasses for employees who quit is NOT in violation, blatant or otherwise, of the FLSA. These guys make upwards of $16.00 hourly plus overtime and reducing their pay does not violate the FLSA. Additionally, "An employer may deduct the reasonable cost of providing the following items EVEN IF the employee's cash wage drops below the minimum wage: Meals, lodging, transportation provided by the employer, fuel and merchandise, and instructional cost. Additional deductions may be made, but minimum wage must result for such things as shortages, damages and uniforms. In the case of misappropriation by the employee as opposed to a mistake, it is possible to deduct the full amount of the theft, even if it reduces the employee's pay below the minimum wage." My quoted source is Business and Legal Reports, Inc., 39 Academy Street, Madison, CT, 800-727-5257. They produce large resource binders for each state covering state and federal laws regulating employment and employment laws.

05-16-2002, 03:26 AM
Regarding a desire to not contradict someone with a JD, the gesture is appreciated. Of course a JD after someone’s name is not a statement of unquestionable wisdom. I, for example, learn at least as much from highly experienced HR professionals as I do from attorneys. The richness of this site is that it takes advantage of a wide variety of experiences. For example I enjoyed the fast and thoughtful response to my posting in which I pointed out that a employer cannot recapture loss due to theft to the extent that it reduces the employee’s wages below minimum wage. I must point out that the fact situation referenced in the message to which I first responded was different from the response to my response. That aside, and also with full respect for BLR’s Business and Legal Reports which is an excellent publication, I will address the situation that initiated this track where an employee steals from the employer and the employer seeks to recoup the loss by docking the employee’s pay. First of all, what the FLSA has to say in no way prevents an employer from terminating an employee or even filing criminal charges against the employee. However, as to the docking question, we can defer to the Department of Labor’s interpretation of the FLSA, specifically Department of Labor Fact Sheet No. 016 which can be seen at http://www.dol.gov/dol/esa/public/regs/compliance/whd/whdfs16.htm. That Fact Sheet says, without quoting the entire document: “The FLSA does not allow uniforms, or other items which are considered to be primarily for the benefit or convenience of the employer, to be included as wages. Thus, an employer may not take credit for such items in meeting his/her obligations toward paying the minimum wage or overtime. . . . . The cost of any items which are considered primarily for the benefit or convenience of the employer would have the same restrictions as apply to reimbursement for uniforms. In other words, no deduction may be made from an employee's wages which would reduce the employee's earnings below the required minimum wage or overtime compensation. . . . Some examples of items which would be considered to be for the benefit or convenience of the employer are tools used in the employee's work, damages to the employer's property by the employee or any other individuals, financial losses due to clients/customers not paying bills, and theft of the employer's property by the employee or other individuals. Employees may not be required to pay for any of the cost of such items if, by so doing, their wages would be reduced below the required minimum wage or overtime compensation. This is true even if an economic loss suffered by the employer is due to the employee's negligence.” For all readers of HrHero, please note the reference in the foregoing passage to theft. As to any contradiction between the view by the DOL of the FLSA and possible variance by BLR, it can probably be reconciled by a full reading of both and an appropriate consideration of particular facts which is outside our consideration of the original question posted on a theft in Louisville, Kentucky. Without engaging in sarcasm about titles, I still believe that anyone that routinely deducts from wages to the extent that those wages are reduced below minimum wages, needs to talk to an attorney or check on what the folks at DOL say on the matter. I also still suggest that taking advantage of someone’s felony probation can raise potential legal problems not to mention the ethical consideration.
Stanley P. Santire, JD

05-20-2002, 01:27 AM
Thanks so much for this great topic (I have rated it a 10). I always advise management to pay monies due at termination rather than become involved in the problems (time and expense) of having a government agency or legal system question our interpretation of a regulation. It it cheaper in the long run.