• Thinking About Charging Your Employee for Breaking His Phone? Think Again.
  • April 24, 2006 | Author: Thomas J. Cole
  • Law Firm: Pepper Hamilton LLP - Philadelphia Office
  • Late last month, the Department of Labor issued new instructions for employers of workers who are exempt from overtime pay under the Fair Labor Standards Act (FLSA) -- don't dock pay for damaged company equipment, such as computers, cell phones, or company cars. Employers who reduce salaries to compensate for damaged equipment risk their employees' overtime-exempt status.

    Just because it's in writing doesn't mean it's binding. Even if an exempt employee signs a document agreeing to permit such deductions from his or her pay, an employer cannot assume that those written agreements will withstand legal scrutiny.

    Out-of-pocket compensation is out of the question. Requiring exempt employees to directly compensate the company for damaged equipment also jeopardizes the employee's exempt status.

    Check with legal counsel first. Changes in employment law occur every day - to make sure you protect your rights and the rights of your employees, consult legal counsel before taking action.