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Jan 03, 2017

Can we deduct from a final paycheck for a missing laptop?

Q&ATermination & ResignationWage and Hour 

Q: We recently had to terminate a remote employee and he has refused to return his laptop. Can we take the cost of the laptop out of his final paycheck?

A: If you are in the State of Washington, there is a narrow window that would allow you to withhold the cost of the laptop from his final paycheck, but the penalties are high if you get it wrong. You can deduct from final pay for breakage or loss of equipment if it was caused by a “dishonest or willful act of the employee,” but only if there was an agreement between you and employee allowing for the deduction. For example, you might meet this requirement if your employee signed a company equipment agreement when the laptop was issued, including an agreement that the cost would be withheld from a final paycheck if not returned, and you made written attempts to collect the property upon termination. However, it will fall on the employer to prove that the employee was being dishonest or willful in not returning the laptop, which might be a tough standard to meet. It’s also important to note that, even if you can meet the law’s requirements to deduct from a final paycheck, you still need to leave the employee with a minimum amount in the final paycheck. If you think it’s too risky to withhold from a final paycheck, your other options to recover the laptop would be to file a claim in small claims court or send a box with pre-paid postage for the employee to easily return it. For questions about this or other state limitations on paycheck deductions, call your Vigilant attorney.

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