After accident in company car, can we recover insurance deductible using payroll deductions?

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in Employment Law,Human Resources

Q. We have a fleet of company cars. If an employee is at fault in an accident, is it legal for us to require reimbursement for the $500 deductible by reducing his pay over a period of three or four pay cycles?

A. No, this would be an unlawful deduction of wages. The Pennsylvania Wage Payment and Collection Law provides a limited list of authorized deductions that employers are allowed to take out of an employee’s paycheck.

It specifically requires that any deduction be for the benefit of the employee. Deductions for cash shortages, damage or loss of the employer’s property are not considered to be deductions for the benefit of the employee.

You could implement a policy requiring a driver who is at fault in an accident to reimburse you for the deductible, but not by making deductions from his or her paycheck.

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