Mack also recommended that the policy define the circumstances in which the employee would be required to pay for the cost of repairing or replacing the property, such as intentional misconduct or failing to return property at the end of employment.Ī policy on charging employees for damage to or destruction of company property must differentiate between exempt and nonexempt employees, said Greg Grisham, an attorney with Fisher Phillips in Memphis, Tenn.ĭeductions from an exempt employee's salary for damage to or destruction of employer's property would violate the Fair Labor Standards Act's salary-basis requirement, he said. The policy should provide notice to employees of any disciplinary action that could result from failing to safeguard company equipment. This is particularly important for electronic devices, such as cellphones, computers and tablets, that may contain confidential company information. Workers should be required to notify a company representative within a specified time in the event of any damage, theft or other loss of company property, Mack said.
The policy also should require that employees maintain the equipment and use it only for its intended function in work-related activities, she added.
When employees damage their employer's property-whether it's a laptop used while working from home during the pandemic or machinery in the employer's facility-how should the company respond? The answer depends partly on the company's policies about its property, as well as whether exempt or nonexempt employees damaged the property and whether the damage was caused by negligence or willfulness.Īs for former employees' damage to equipment or failure to return company property, employers will have to weigh the costs of litigation versus the likelihood of recouping expenses.Ī policy regarding company property should emphasize that any equipment provided to the employee remains the sole and exclusive property of the company, said Emily Mack, an attorney with Burr & Forman in Nashville, Tenn.
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