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Employment Law/Retaining money for loaned tools


If I loaned an employee a company tool and he does not return it, may I take the value of the tool out of his last paycheck if he has not returned it?  (He did not "sign" any paperwork as such. However, he was told when he was hired this is our policy.)  Thank you!

No this is not allowed in the state of Michigan.

Public Act 390 of 1978, in section 7(1) states; ". . . an employer shall not deduct from the wages of an employee, directly or indirectly, any amount . . . without the full, free, and written consent of the employee, obtained without intimidation or fear of discharge for refusal to permit the deduction."  

Since you do not have the consent of the employee you cannot deduct any amounts not require by law such as fed tax and social security taxes. It doesn't matter what he is told you must have it in writing.

You can either invoice him for the cost of the tool, ask him to return the tool, or if he does not return the tool take him to small claims court.


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Shirley McAllister, CPP, PHR


I can answer questions about payroll laws and payroll tax laws and Human Resource laws and agencies. I can answer federal payroll and human resource law questions and most states; I do not have a knowledge of the local taxes for cities and counties within the state. If and when I can I will try and send you the website where you can reference the answer and where you can obtain more information as well as a contact number if needed for that particular agency. Some agencies I have worked with are IRS, Department of Labor (federal and state), Revenue Canada (and provincial governments), Inland Revenue, OSHA (0ccupational Safety and Health Administration); Social Security Administration and National Child Support as well as other agencies in Payroll and Human Resources. Some Laws I am particularly familiar with are FLSA (Fair Labor Standards Act), ADA (Americans With Disabilities Act), FMLA (Family Medical Leave Act) COBRA (Consolidated Omnibus Reconciliation Act ) , QDRO's, QMCSO's, and other support orders and garnishments, USERRA (Uniformed Services Employment and Remployment Rights Act,PPA Act (Pension Protection Act of 2006, As well as most other employment type acts. I am also well versed in the Title V Civil Rights Act and the HIPAA (Health Insurance Portability and Accountability Act).


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