My Worker Did Something Stupid That Cost My Company Money. In Manhattan, Can I Deduct The Company’s Loss From My Worker’s Paycheck?

No. In Manhattan, NYC, a company may not deduct from an employee’s paycheck, charge against an employee’s wages, or require an employee to reimburse the company for, monetary losses to the company, even if the employee’s carelessness caused the losses. For example, if an employee loses or damages a laptop computer or other property belonging to the company, the company may not deduct the cost of replacing or repairing the computer or other property from the employee’s paycheck.

Likewise, an employer may not withhold, from a cashier employee’s paycheck, a shortage in a cash register. That said, in the absence of a contract, a company may fire employees for causing the company a loss, carelessly or otherwise.

In Manhattan, NY, an employer may not deduct monetary losses to the company, for which an employee was arguably at fault, from the employee’s paycheck. See N.Y Labor Law § 193(1). Similarly, in Manhattan, an employer may not make any charge against wages, or require an employee to reimburse the employer for, monetary losses to the company for which the employee was arguably at fault. See N.Y Labor Law § 193(2). So, as stated, an employer cannot lawfully deduct from an employee’s paycheck, charge against an employee’s wages, or require an employee to reimburse the employer for, lost or damaged company computers or other company property (even if the employee’s negligence caused the loss or damage), or for a shortage in a cashier employee’s cash register.

In Manhattan, the only deductions from or charges against an employee’s wages which an employer may make, and the only reimbursements which an employer may require from employees, are (i) those required by law, such as deductions for social security contributions or for income taxes, and (ii) those which are “for the benefit of the employee” and are expressly authorized in writing by the employee, such as payments for insurance premiums, pension or medical benefits, charitable contributions, U.S. bonds, union dues, and the like. See N.Y. Labor Law § 193(1), 193(2).

Requiring employees to reimburse the employer, in whole or in part, for the costs of repairing or replacing company property which the employees carelessly lost or damaged, or for a shortage in a cashier employee’s cash register, is not “for the benefit of the employee.” Accordingly, section 193 of the New York Labor Law bars a company from requiring employees to reimburse the company for such costs.

However, in the absence of a contract, a company may fire an employee in Manhattan for causing the company a loss, carelessly or otherwise. So, for example, an employer may fire a worker for losing or damaging company property, negligently or otherwise.

A company has this autonomy because, in the absence of a contract, employment in Manhattan, NYC is at-will. In Manhattan, an at-will employee is subject to termination for any reason or no reason, unless (i) the discharge is for a reason prohibited by statute or (ii) the discharge is prohibited by public policy.

If your company needs assistance or guidance on a labor or employment law issue and your company is located in the Manhattan, New York City area, call Attorney David S. Rich at (347) 941-0760.