You Be the Judge

Employee Loans

Your company has loaned an employee $2,000 for personal use. When he was laid off, the company deducted the balance due ($1,000) on the loan from his final paycheck.


This is not legal. Under California law, an employee must be paid all wages final wages "without abatement or reduction." By illegally deducting the loan balance from the final pay, at a minimum the employer will be exposed to Department of Labor Waiting Time Penalties of up to 6 weeks wages.

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Restaurant Owner fined for overtime and back wages

Alphonse Silvestri, owner of the now-closed San Rafael restaurant, Seafood Peddler, thought he could get away with paying below federal minimum wage and failing to pay overtime wages (among a number of other infractions). 

He was wrong.  

In October, the US District Court returned a verdict against Silverstri, to the tune of $185,000. Read Richard Halstead's article in the IJ for the whole, messy story. 

While Silvestri appears to have been aware of his violations--he even threatened employees if they took action--it's possible to unintentionally violatate wage and hour laws, through a lack of understanding or carefuly oversight. Don't let this happen to you.  If you have question, consult an employment law attorney, because mistakes can be very costly. Ask Mr. Silverstri.