Billing a Termed Employee
kristankat03
14 Posts
Our company "checks out" company tools. Employees are aware that they must pay for any lost tools and are responsible for returning tools upon termination (voluntary or involuntary). In the event an EE does NOT return his tools upon termination, the amount is with held from final paycheck. An EE was recently termed after I finished payroll and mailed the final check to their residence. It turns out that they did not return the tools. The termed EE is friends with another EE, whom of which I asked to talk to the termed EE about returning the tools. The EE still employed with us said that he told him, but the termed EE still has not returned the tools. Can I bill the termed EE for the unreturned tools in hopes that he will either return the tools or pay for the tools?
Comments
Along the lines of what RegDunlop posted, you also need to make sure you are paying AT LEAST minimum wage. Federal laws FLSA state that you can not drop a person's rate of pay below minimum wage for involuntary deductions. And company tools are generally involuntary deductions. There are a few work-arounds, but they are not easy and usually the company must have a current deduction authorization to do so (not one the employee signed when they were first hired).
"Both the FLSA and state wage laws determine whether an employer may deduct certain amounts from an employee’s wages, and whether those deductions can take the employee’s hourly wage below the minimum wage.
Under the FLSA, allowable deductions from the minimum wage may include: (1) Meals, Lodging, and Other Facilities; (2) Voluntary Wage Assignments; (3) Loans and Wage Advances; (3) Vacation Pay Advances; (4) Employee-Owed Payroll Taxes; (5) Union Dues; (6) Court-Ordered Garnishments or Statutorily-Required Wage Attachments; and (7) Cash Shortages Due to Misappropriation." from www.flsacounsel.com/minimumwage.htm
Note that returning company property is not one of the allowable deductions from MW.
You say that employees are aware that they must pay for any lost tools etc. Do you have this in writing and do the employees sign it? If they do then I would include the signed copy with a letter asking for the return of the tools. If you do not have a signed policy, it will be very difficult to recover them if you have to go to small claims court. Remember the rule of thumb, if it's not in writing it didn't happen.
You need to be very careful about what you deduct from a final check. Most states say that you can not deduct for lost equipment, breakage etc as they are a cost of doing business. I would check with your state regarding this matter asap. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
States differ widely on what has to take place in order for you to deduct expenses from paychecks. In general, if a state allows you to deduct for lost or broken equipment, a written agreement in advance of the loss is required. In most states, as Pam said, lost and broken equipment is a cost of doing business and, in some cases, even a prior written agreement is unenforceable. What state are you in?
I agree with the sentiment that you should simply ask for return of the tools before sending a bill. You might add to that the option to arrange to have someone from the company pick the tools up (with a witness present and don't enter their premises under any circumstances).
It doesn't sound like you deducted anything from the paycheck so you're in good shape there.
We send a letter to their last known address requesting the return of the tools or payment of $XX.XX to cover the replacement cost. We add language that if we do not receive either the tools or the payment within 30 days we will proceed with a small claims case against them.