By Amy Letke, Integrity HR

At times, cities may find it advantageous to issue certain equipment, such as cell phones or computers, to employees to increase job efficiency. But as the old saying goes, with privilege comes accountability: Employees should properly care for any city property, equipment, or supplies entrusted to them, and sometimes should pay for careless actions. However, even well-intentioned attempts at this accountability can go astray if there is not a clear understanding of federal requirements regarding wages and deductions.

It is common practice for many organizations to deduct the cost of damaged or lost goods and equipment from the wages of employees. I am actually on board with this, to an extent. I think that if a city provides a paid cell phone to an employee and that employee loses that phone, that employee should have to pay for the replacement. If an employee drops his city-owned laptop while transporting it without using his city-provided computer bag, he should have to pay for the repair. However, if an employee is in a car accident in the city vehicle, I’m not convinced she should have to pay the insurance deductible. Somewhere a line must be drawn to determine whether or not an employee has been negligent in the care of the product, or whether an accident has truly happened. Regardless, that is for the employer to decide and specify in the policy, if they choose to have one, and to apply equally, and consistently, and justly.

In order to write and apply the policy in such a fashion, however, employers must know and understand the parameters within the policy. For instance, consider these:

• Employers may not make any deductions from an employee’s paycheck without the employee’s written authorization, or as provided by state or federal law;

• With respect to non-exempt employees, an employer may not require an employee to pay for an item that is for the benefit or convenience of the employer if doing so reduces the employee’s pay below minimum wage (so, if an employee earns minimum wage, you can never deduct for the expense of loss or damages);

• With respect to exempt employees, the Department of Labor has issued an opinion that such deductions risk their exempt status under the Fair Labor Standards Act (FLSA). They ruled that such a deduction is not allowed because, with only a few exceptions, the FLSA does not allow deductions in compensation due to the quality of work performed. They also ruled that employers cannot require employees to make an out of pocket reimbursement (versus payroll deduction) because this would still prevent them from receiving their predetermined salary “free and clear.” Now, can the employee be disciplined or fired for damage or loss of city property? Yes, he or she can, as long as the city follows the policy and/or statutes regarding termination. In addition, the city can file a civil suit or make a claim in small claims court to recoup the money owed for the loss or damage.

There is certainly a place for policies that require employees to be financially responsible for their city issued equipment. Just be certain that you are aware of the rules and the limitations before you implement one, or else you might find that the equipment in question was not worth the fines and damages it cost in the long run.

Integrity HR is a human resources services company based in Louisville. They can be reached at 502-753-09790, or see them at booth 513 at the 2010 KLC Conference & Expo.