The direct and practical answer is that the employer, in most instances, should not deduct the money from the employee's check. There are both legal and practical reasons for this. Additionally, in certain limited situations there is no reason not to make the deduction.
In general, such deductions for missing funds are a fine that is not permissible. The legal answer is to discipline employees who come up short on their cash count, up through and including termination of employees with large shortages or repetitive small shortages. Obviously, if the evidence is strong enough, then a management decision must be made as to whether law enforcement will be called in and any possible prosecution pursued.
The controlling statute is La. R.S. 23:635, which provides:
"No person, acting either for himself or as agent or otherwise, shall assess any fines against his employees or deduct any sum as fines from their wages. This Section shall not apply in cases where the employees willfully or negligently damage goods or works, or in cases where the employees willfully or negligently damage or break the property of the employer, or in cases where the employee is convicted or has pled guilty to the crime of theft of employer funds, but in such cases the fines shall not exceed the actual damage done. "
La. Rev. Stat. Ann. § 23:635
The key to application of this statute is understanding that it is part of the overall scheme of the employee paycheck statute, and it is therefore strictly construed. Thus, when it comes to funds, unless the employee is convicted of or pleads guilty to theft of employer funds, a deduction is an illegal fine. A deduction from an employee's paycheck for missing funds subjects the employer to the full range of fines and sanctions available to any employee who does not receive their full paycheck, as set forth in La. R.S. 23:631-633. The potential sanctions include the missing wages, 90 days penalty wages, and attorney's fees and court costs to a prevailing employee.
The savings clause, which purportedly protects an employer if the employee has been convicted or has pled guilty of theft is really of little benefit as the paycheck involving the missing funds is due much more quickly than any likely criminal prosecution could take to unfold.
The situation with regard to non-monetary damage or loss to employer property is less clear. Often, the ultimate outcome of the issue will turn on the factual question of whether the employee was willful or negligent in causing the loss.
Circumstances in which the courts have held that a paycheck deduction may be levied without it constituting an illegal fine include:
- Deduction from the paycheck of of a willfully absent or tardy employee for the amount of time missed.
- Deduction from the paycheck of the actual value of employer property lost or taken by the employee.
- Deduction from the paycheck when the employee negligently damaged equipment, employee had been warned that such deduction would be made when appropriate, and employee had agreed to this condition of employment.
Other circumstances in which the courts have held that a paycheck deduction may not be levied because the deduction would constitute a fine include:
- Deduction from the paycheck for the cost of special employee training.
- Deduction from the paycheck when the employee ordered additional contract labor and did not use the contract labor.
- Deduction from the paycheck when there was insufficient evidence that the damage to employer property occurred because of the employee's negligence or willful action.
It should be noted that when a deposit designed to ensure the return of equipment is required by the employer at the time equipment or property is issued for use, retention of the deposit when the equipment is not returned is not a fine within the meaning of La. R.S. 23:635.
Given that the potential penalties for failure to completely and timely pay can be substantial under the paycheck statutes, if the amount at issue is not fairly large, it is usually a better decision to pay the employee, impose non-monetary discipline for failure to protect company property, and move forward with other business. If, however, the amount is large or the negligent/willful act is obvious or admitted by the employee, then the pay can be withheld.