Limits placed on company’s ability to recover loss of equipment

Q&A with Kathy R. Neal

published in The Oklahoman | December 10, 2009

McAfee & Taft labor and employment attorney Kathy Neal was featured in an Oklahoman article about the limitations employers face when trying to recoup from employees the value of lost equipment or stolen property.

Neal told the Oklahoman, as a general rule, you cannot deduct from the salary of an exempt employee without running the risk of losing the exemption and being liable for overtime. Not only must an exempt employee receive a minimum salary of $455 per week, but according to Neal, “this salary cannot be subject to variation for the quality of the work performed and must be received ‘free and clear.’” She went on to say that deductions are sometimes permissible from other forms of compensation, including truly discretionary bonuses.

When asked if companies can legally require cashiers to reimburse the company for shortages from their individual registers, Neal explained that under the FLSA cashiers are nonexempt employees and are not subject to the same rules as exempt employees. “You may deduct from the cashier’s pay for cash shortages as long as the deduction does not drop the cashier’s pay below what she is entitled to for minimum wage and for overtime hours.” Neal also warned that Oklahoma law requires a signed payroll deduction agreement in advance of a deduction.