You work hard for your wages. When your employer makes illegal breakage charges from your paycheck, you deserve justice and compensation. If you work in New York, your employer is only allowed to take legally acceptable deductions from your paychecks, such as weekly tax deductions and healthcare premiums.

If your employer has taken a deduction from your paycheck for equipment you broke, it’s important to speak to an attorney as soon as possible. The New York employee rights attorneys at Lipsky Lowe LLP are prepared to help you understand your rights and pursue the justice you deserve. 

What Are Breakage Charges?

Employers spend money to buy the equipment, tools, and materials necessary to run their businesses, regardless of their industry. Employers want to ensure their equipment is treated well to last as long as possible. When an employee breaks an employer’s equipment, whether intentionally or accidentally, the employer may try to deduct the cost of repairing or replacing the broken item from the employee’s paycheck. This type of deduction is called a breakage charge. 

Larger corporations may be insured for broken equipment and consider replacing or repairing items as a cost of doing business. On the other hand, smaller employers may not be as tolerant and try to pass the costs off to the employee. 

Employers Cannot Charge Employees For Breakages in New York

New York Labor Law (NYLL) §193(2) states that employers cannot charge employees for breakages by deducting the cost from their wages or requiring the employee to pay for the breakage through a separate transaction. However, there are two types of permitted paycheck deductions for breakages. 

New York Department of Labor’s Regulations specifically prohibit employers from dedicating money from an employee’s pages for breakage. Specifically, N.Y. Comp. Codes R. & Regs. tit. 12 § 195-4.5 lists the following as prohibited deductions from an employee’s paycheck:

  • Repayment of employer losses, including for breakage and spoilage
  • Cash shortages
  • Fines or penalties the employer incurred because of the employee’s conduct, and
  • Fines for misconduct, tardiness, excessive leave, quitting without notice, and misconduct

When Are Paycheck Deductions Legal?

Employers can charge employees when doing so is in accordance with the provision of any law, rule, or regulation issued by a government agency. Additionally, employers can charge employees when the charges are expressly authorized in writing by the employee and are for the benefit of the employee. In other words, an employer can’t tell an employee “I’m charging you for breaking that item” after it happens and then lawfully deduct the amount from the employee’s paycheck. There must be prior authorization kept on file on the employee’s premises. 

When an employer makes a substantial change in the terms of the payment deduction agreement, they are required to notify the employee before implementing the change. Additionally, the employer must keep the authorization on file while the employee is employed and until six years after employment ends. 

The Difference Between State and Federal Law

Under federal law, employers have the right to charge employees for the items they break or spoil while on the job. As long as an employee would still earn at least minimum wage, the employer can deduct the cost of the broken goods from the employee’s paycheck. When a business is located in New York state, or has employees working in New York state, New York’s labor laws generally apply and protect the employees. New York’s labor law prohibiting deductions for breakages applies to all employers and employees. The law protects all workers in New York, including those who are paid off the books or undocumented. 

Can an Employer Sue an Employee for Breakage or Spoilage?

An employer may think they can attempt to recover the cost of breakage or spoilage from an employee through a civil lawsuit. However, New York courts have ruled that employers cannot pursue damages from an employee or former employee based on an employee’s poor job performance or negligence. 

Doing so would allow employers to work around the New York Department of Labor’s rule prohibiting employers from charging employees for breakage. Courts have ruled that employers can pursue compensation from employees under the “faithless servant doctrine,” which covers misconduct ranging from intentionally charging personal expenses to a company credit card to engaging in fraudulent reporting of hours worked. 

How to Recover Compensation After an Illegal Breakage Charge Deduction

If you believe your employer has illegally deducted breakage charges from your paycheck, you have the right to recover those lost wages by pursuing a claim against your employer. Under New York law, you have the right to ask your employer for the rational for the paycheck deductions. 

You also have the right to request proof that your employer told you about your deductions. If your employer doesn’t provide the required information, you have the right to pursue a complaint with the New York Department of Labor and consult with a wage and hour attorney in New York. 

You are also protected from retaliation by your employer for requesting information about the deductions from your paycheck or pursuing a wage and hour claim against them. The New York Department of Labor handles claims related to unlawful paycheck deductions. Speaking to an attorney is important because there are strict time limits for pursuing a claim for unlawful paycheck deductions.

Discuss Your Case with an Employment Attorney in New York 

Even the most cautious employees can accidentally break equipment while on the job. If you’ve broken equipment or caused your employer’s products to become spoiled, your employer cannot deduct the resulting expenses from your paycheck. If you know or suspect that your employer has violated New York wage and hour laws by making unlawful breakage deductions, you’ll benefit from speaking to a skilled employment attorney. Don’t hesitate to contact Lipsky Lowe LLP to schedule a complimentary case evaluation and learn more about your legal options.