Can an employer deduct shortages from a cash drawer from an employees payroll check

[activedreamer]

What is the name of your state (only U.S. law)? New York.

I am a manager for a company of less than 400 employees and recently the CEO passed down a rule that if an employee is short on a register that the funds are to be recovered or the employee is terminated. Recovery takes place as a payroll deduction. This is for amounts greater than five dollars. I have worked in retail and food service for a long time and I am not 100% if this is legal. There just seems to be alot of grey areas in a sitution of cash missing. Any help would be greatly appreciated.

 

[ecmst12]

It would only be legal if the employee explicitly agreed to the deduction in writing. And even then, in NY that might not fly. It would be wise to consult with the DOL before implementing this policy.

 

[pattytx]

Is this food service?
http://www.labor.state.ny.us/formsdocs/wp/LS605.pdf

Even if it isn't, this is not a good idea. If the employees are making minimum wage, federal law would prohibit such a deduction. And if the deduction would take the employee effectively below MW or cut into their overtime pay, the same federal law would prohibit the deduction in that case as well. Under federal law, MW and OT must be received "free and clear".

Of course, you could terminate them, but for one mistake of a small amount, would it be worth it? It would be different, of course, if the "mistakes" were larger amounts and occurred relatively often. Without proof that they actually stole the money, however, you would probably be on the hook for unemployment.