Most everyone knows that there is a difference between a gross paycheck and a net paycheck. If you’re not, a gross paycheck is the product of the number of hours you work and your gross pay (e.g. $25/hour, etc). From your gross paycheck, things like federal taxes, state taxes, retirement plan contributions, and other deductions are taken out to give you the net paycheck you actually take home to spend, er, I mean, save prudently.
However, are all kinds of deductions allowed from a California employee’s paycheck? That’s the topic of this post.
In California, the applicable law for deductions from an employee’s paycheck is California Labor Code section 224, which authorizes four broad categories of permissible deductions:
- Deductions authorized by state or federal law. Child and spousal support would be in this category;
- Deductions expressly authorized by the employee in writing for insurance, health or medical dues;
- Deductions to cover health and welfare or pension plan contributions expressly authorized by a collective bargaining or wage agreement;
- Deductions not amounting to a rebate or reduction from the standard wage arrived at by collective bargaining, agreement, or statute.
As with everything in the law, however, exceptions exist. One exception is that an employer is allowed to deduct from an employee’s paycheck for the reasonable cost of board, lodging, or other facilities furnished to the employee in addition to their wages. 29 Code of Federal Regulations 516.27.
What is more common in my experience — which is, again, by no means exhaustive — is for an employer to try and deduct for things that don’t qualify under any of the four categories above and hope — usually successfully — that the employee doesn’t know their rights.
Common improper deductions I have encountered include:
- The employee owes the employer a debt (e.g. employee broke equipment or property belonging to employer) and the employer tries to deduct it from the employee’s pay. In general, self-help like this is not allowed. The employer needs to pursue debt recovery in court through a separate lawsuit.
- The employer tries to recoup training or hiring costs from the employee. This is generally prohibited under California Labor Code section 2802(a).
If you have a situation in which you’re wondering about deductions that are being taken from your paycheck in California, hopefully this post helps. Employment law in California can be confusing so if you have any doubt at all, please consult an attorney. This post is not meant to be comprehensive.
Latest posts by Andy Chen (see all)
- Cost-Benefit Analysis in Forming a Limited Liability Company - July 12, 2023
- Minimizing Tax and Legal Liability When Starting a Business - July 9, 2023
- Law School Help: California Criminal – Robbery - July 4, 2023