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Business/Economy

Can we deduct an employee’s theft of cash from her paycheck?

  • Author: Lynne Curry
    | The Workplace
  • Updated: April 16
  • Published April 15

(Getty Images)

Q: We recently fired an employee for stealing money out of our cashbox. Initially, she denied stealing anything and tried to point the finger at another employee. She didn't realize we had a security camera. When we brought the employee in and showed her the tape of her removing the money, she screamed at us and left the building. We'd ordinarily issue her a check today. Can we deduct what she stole from her final paycheck?

A: No, not unless your employee agrees. The federal Fair Labor Standards Act and state minimum wage laws require that employers pay employees for all hours worked. The FLSA doesn't exempt employees who behave badly, violate company policy or commit crimes against the employer. Even if a court finds your employee guilty, you don't have the right to withhold earned wages, even those earned in the hours during which she stole.

You can, however, give your employee the option of either voluntarily paying back what she stole or facing prosecution. The Alaska statute governing wage deductions, 23.10.085 (c) doesn't limit an employer's right to enter into a written agreement with an employee to deduct money the employee owes the employer. It does prohibit an employer from requiring or inducing (through force, intimidation or threat of dismissal) an employee to return or give up any part of the compensation to which the employee is entitled. Additionally, employers can't reduce an employee's wages below minimum wage for theft or cash shortages unless the employee admits, willingly and in writing, to having personally taken the specific amount of cash alleged to be missing.
You can, of course, turn your former employee over to the police or pursue recovery and damages in civil court.

Q: When I jumped on one of my employees this morning for being on his cellphone, he told me he had been texting a coworker. I thought he was bs-ing me and so asked him to hand me his cellphone. When I looked at his last 10 texts, I saw that they had all come from co-workers who had asked or responded to work-related questions. He then told me texting made him and others more efficient.

In the past, I've problems with employees who spent time on personal texts. I've made some of them leave their cellphones in their car so they wouldn't be distracted. But this morning's discussion made me think about allowing texting. If I allow my younger employees to text, what guidelines should I install?

A: Although personal texting and cellphone access distracts some employees, texting serves a valuable role in workplace communication. Because most individuals carry cellphones with them, texts generally reach recipients faster than do emails — regardless of the recipients' locations. Further, most of us limit ourselves to concise messages when we're texting, while our phone conversations or even our emails can run on. Texting also works wonderfully for automated notifications or when asking quick, text-friendly questions.

As you've noticed, some employees misuse texting. Many employees who keep their cellphones handy send and answer as many personal as work texts. While you don't need to stop your employees from texting, you can discipline them for cellphone abuse.

Remind your employees that their texts represent your company as well as them as individuals. Ask that they keep their texts professional and ditch the emojis. Suggest they identify themselves when they text others for the first time. Let them know that texts can seem invasive to many and ask that they respect non-texters, and not repeatedly text if they don't get a response. Remind them that texts don't evaporate, and can be discovered in an investigation.

Finally, ask that when they have a conflict message to transmit, they do it in person or over the phone, to allow for two-way dialogue.

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