Ask the Expert: How Can Employers Hold Employees Liable for Property Damage?

Question: We provide laptop computers to all our personnel. Many employees damage them during employment or return them with damage upon leaving employment. What are our options for recouping from employees the costs of repairing or replacing the damaged employer-owned materials? Answer: Basically, the company’s two main options for recuperating losses for damage to company […]

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Question: We provide laptop computers to all our personnel. Many employees damage them during employment or return them with damage upon leaving employment. What are our options for recouping from employees the costs of repairing or replacing the damaged employer-owned materials?

Answer: Basically, the company’s two main options for recuperating losses for damage to company property include previously authorized deductions through payroll and a claim based on property or wrongful act laws. Although Idaho law allows you to make deductions from an employee’s paycheck for damage to company property and for a lawsuit based on negligent or intentional harm to company property, there are issues to consider. The main options presume the damage wasn’t caused by criminal or willful intent, which would need to be addressed separately through local authorities.

The first considerations are related to payroll deductions. A deduction from a nonexempt employee’s paycheck can only be made if written authorization was given before the deduction (e.g., an authorization form at the time the computer was issued) and if the deduction won’t cause the employee to receive less than minimum wage for that pay period.

For exempt employees, even when written authorization was previously given, any deduction would violate the salary-basis requirement under the Fair Labor Standards Act (FLSA), creating potential liability for an overtime claim.

The remaining considerations are related to pursuing a remedy in the Idaho court system. Even though a claim would be available in a civil lawsuit or small claims court, your litigation costs may easily outweigh the available remedy. Also, the employee may decide to pursue a counterclaim or discrimination charge in response—or even that the timing of the lawsuit could be perceived as retaliating against the former employee’s own lawsuit pursuing a wrongful discharge claim or another right protected by law.

Of course, it’s best to have a policy in place describing your expectations for the care of company property and your intentions to hold employees responsible under certain circumstances for damage to, or destruction of, your property, whether that be through direct disciplinary actions or seeking to recoup the losses.

Jason R. Mau is an attorney in the Boise office of Parsons Behle & Latimer. He can be reached at jmau@parsonsbehle.com.

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