Docking Pay For Property Damage Not Permitted Under Massachusetts Wage Act, Court Rules

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Over the years, Massachusetts employers have wondered, “What can I deduct from an employee’s paycheck?” This week, in Camara v. Attorney General, the Massachusetts Supreme Judicial Court, deferring to the Attorney General’s interpretation of the Massachusetts Wage Act, narrowed the list of potential deductions.

ABC Disposal Service had a policy of allowing workers found by ABC to be at fault in accidents involving company trucks to agree to a deduction from their earned wages in lieu of discipline. ABC believed that this policy resulted in a 78 percent reduction between 2003 and 2006 in costs attributable to damage to vehicles and personal property.

However, the Attorney General’s offi ce found that ABC’s policy violated the “valid setoff” language in the Massachusetts Wage Act, and conducted an audit of the deductions made by ABC for a two-year period. It found that ABC had deducted $21,487.96 from the wages of 27 employees (who chose to reimburse the company for damages between $15 to $30 a week). It required ABC to make restitution and, in addition, assessed a civil penalty of $9,140. After timely appeals, the Supreme Judicial Court took the case up on direct appellate review.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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