As HR professionals implementing performance management plans we find ourselves preaching all the time about establishing a culture of accountability. Employees must be held accountable to their goals and responsible for their actions. Sometimes, however, even well intentioned attempts at this accountability can go astray if there is not a clear understanding of federal and state law in regard to wages and deductions.
I am speaking of the common practice of many employers to deduct the cost of damaged or lost goods and equipment from the wages of employees in an effort to establish a culture of accountability. I am actually on board with this, to an extent. I think that if an employer provides a company 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 company paid laptop while transporting it without using his company provided computer bag, he should have to pay for repairs. However, if an employee is in a car accident in the company vehicle, I’m not convinced she should have to pay the insurance deductible. It’s up to management to establish where the 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, consistently, and justly.
In order to write and apply the performance management policy in such a fashion, however, employers must know and understand the parameters within the policy. For instance, consider these situations:
Now back to establishing that culture of accountability. Can the employee be disciplined or fired for damage or loss of company property? Yes, he or she can. If there is an employee who has a history of not being responsible with equipment, his or her manager should definitely take action through counseling and discipline, including no longer having the convenience of having the company provided tool.
There is certainly a place for policies that require employees to be financially responsible for their company 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.
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