James F. Mahoney, Attorney

April 2016

Charging Employees for Damage They Cause

When your employee needlessly damages company property or cargo belonging to another, can you dock his/her pay?

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In Arizona, the law says you can. Per A.R.S. § 23-352. Withholding of Wages:

No employer may withhold or divert any portion of an employee’s wages unless one of the following applies:

The employer is required or empowered to do so by state or federal law.

The employer has prior written authorization from the employee. An employer shall not withhold wages under a written authorization from the employee past the date specified by the employee in a written revocation of the authorization, unless the withholding is to resolve a debt or obligation to the employer or a court orders otherwise.

There is a reasonable good faith dispute as to the amount of wages due, including the amount of any counterclaim or any claim of debt, reimbursement, recoupment or set-off asserted by the employer against the employee.

Accordingly, under Arizona law, an employer who has a written agreement with an employee may withhold wages that represent an amount of any claim of debt, reimbursement, and recoupment or set-off.  The altered wage paid must, however, never fall below the minimum wage in Arizona. Of course, if the employer is otherwise compensated by insurance, suit or subrogation, the employee must be reimbursed the lost wage, even if he’s no longer in your employ.