The money an employer takes out of an employee's paycheck goes to the employer to withhold money to pay for government funds or an agreed share of costs. The employee loses only the amount of wages that are a fair cost.

Payroll deductions make the employer and the employee even. They do not take money that is rightly owned by the employee.

Like Money in the Bank

The paycheck is guaranteed to the employee. The employer pays the employee to make the two even-- pay for work. Since the work has already been given, the money owed is not treated like any other debt. The employer has to measure up to this promise, not one cent short and in their hand.

Every penny owed goes into the employee's bank account. But, the employee can make an offer and take on the costs of paying for the standard deductions.

Deducted Under Law

The laws in California and the federal laws allow employers to make regular payroll deductions. Income taxes, both state and federal, are the most typical deductions. Amounts are also regularly taken out for social security and unemployment insurance. Creditors with the legal authority to garnish wages, including the governments, can take money out to lower a debt owed by the employee or set the whole amount right.

Agreed Share In Writing

Some costs are important enough to set up a regular payroll deduction. An employee can agree with an employer to set one up. The two just have to sit down and make an agreement in writing that clearly states the deduction is agreed to. Agreements can be made on insurance premiums and benefits plan contributions. When a deduction is not taking back an amount rightfully owed, there is an opportunity to make an agreement.

A Fair Share

Standard agreements can protect employee wages and set aside amounts for payroll deductions. Wage agreements and collective bargaining agreements both can make a deduction a standard for all employees that agreed. A clear statement the deduction is agreed to settles the accounts for health, welfare, or pension contributions.

Extra Costs of Faults at Work

Money does come out of an employee's pocket when the employer loses cash or property because of the employee's fault. The Industrial Welfare Commission Orders on wages allow the employer to ask the employee to take on the costs of settling the employer's account at a balance they would have had in the account had the employee not made a grossly negligent mistake, lied, or willfully took something of value from the employer. A California appeals court in the case Kerr's Catering v. Department of Industrial Relations (1962) said employee wages are not something employers, and other creditors generally, can take an interest in and ask the employee to give up. A cashier does not have give up their pay to cover for the shortage in money in the cash drawer at the end of the day.

The employer, day in and day out, bears the losses of doing business. Cash shortages are a common result of carefulness in work that falls a little short of a sure thing. A broken copier is a regular experience. A lost software CD does not justify a wage cut and take.

The employer can discipline the employee, and if necessary, fire them. Even take them into court to recover their losses. But, taking wages is not a just act under California law.

The Costs Given Away

The typical worker willingly agrees to give up some of the pay for the standard payroll deductions. Costs the employer has to pay for that help make the employees productive and keep them well off they can ask an employee to give out of their paycheck.

Sources:

California Labor Code Sections 221-224 (2011).

California Department of Labor Standards and Enforcement, Payroll Deductions and Offsets Against Wages (January 2011).

Industrial Welfare Commission, Order No. 1-2001 Regulating Wages, Hours and Working Conditions in the Manufacturing Industry (Rev. October 2006).