DennisBeaverDecember 31, 2009 (Original publish date) • By Dennis Beaver

Last week I told you about the owner of an insurance agency in San Diego who was requiring employees to buy all of their insurance from the agency, deducting any cash shortages from employee paychecks, and creating an atmosphere of real fear. “If we were to complain,” wrote my reader, “most of us are afraid of losing our year-end bonus and being fired.”

Sue and her co-workers are in an increasingly common situation. On the condition of not revealing names or location, I spoke with Deputy Labor Commissioners in a number of states who acknowledged a growing problem of wage and hour abuses across America not seen for years.

One hearing officer in the mid-west dared to be politically incorrect with her comments. “There is no nice way of saying this, but ripping-off employees is especially common among the recent wave of new immigrants from some third world countries. We see shop owners too cheap to obtain legal advice, yet they drive off in $100,000 luxury cars, reflecting an attitude that cheating everyone is perfectly fine. They don’t get away with it in my court!”

Sue’s boss is facing jail

Unfortunately, my reader made me promise that I would not pick up the phone and share a piece of my mind with her employer, Miss Simone Legree, for if I could have, then I would have asked one question: What color sheets would she like to bring for her year in jail. Labor Code Section 450 makes it a misdemeanor to do what Sue’s employer is demanding.

“One of the consequences of the economic downturn is that some employers are getting away with things absolutely forbidden by law. For example, employees are being told where to buy their work clothing, where to buy and what brand of tires for their vehicles, and on it goes.”

“Most employees have no idea that if an employer requires employees to purchase a certain brand or to patronize a specific business, then the employer has to pay!”

“Employees cannot be required to buy anything from an employer, but we see this all the time. It’s a predatory way of taking money out of someone’s paycheck.”

Another area where Sue’s boss is getting herself in trouble concerns deducting “missing” money from employee paychecks.

“Unless there is proof this employee has willfully damaged property, or stolen money, it is illegal to deduct those loses from their paychecks. If it turns out the employer was wrong, and the employee is no longer working there, then things become interesting,” a Deputy Labor Commissioner in Los Angeles told me.

“By interesting, I mean that if the employee files a complaint with our office, we could order the employer to pay waiting-time penalties for up to 30 days. That’s the daily rate of pay times 30! So, employers must use extreme caution when making deductions for damaged or stolen property.”

Common areas which

get employers in trouble

Labor Laws in virtually all states prohibit an employer from:

(1) Taking any or part of tips left by customers for the wait staff. Customers should be especially careful in any restaurant which automatically adds 15% to the bill for service. This money goes into the pocket of the owner, not the waiters.

(2) Charging employees for employer-required uniforms, badges, equipment or supplies to be used on the job. If an employee is required to have a computer and internet access, then the employer must supply it. If a bond is required, then it must be paid for by the employer.

(3) Charging to do a credit report, physical examination or drug screen.

Fortunately, with internet access, it is fairly easy to become familiar with one’s rights and obligations, as either employee or employer. The California Department of Industrial Relations has and excellent website.

Should the employees consider a law suit?

There is no simple solution to my reader’s problem. Yes, she and her co-workers have the right to speak with a Deputy Labor Commissioner, the right to file a complaint, and, probably the right to start looking for another job if they do.

“It is common to do a background on new applicants, and nothing is a greater deal breaker than discovering that your fantastic applicant was involved in a bloody mess with a former employer,” cautioned every Deputy Labor Commissioner I spoke with.

In today’s job market, at times it is best to accept the situation, or just quit and move on. This is not the kind of advice I am proud of handing out, but difficult economic times dictate being grateful one has a job.


Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.



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