I spoke with yet another operator last week who shared with me how he “fines” his drivers for various “infractions.” If you have been in this business any length of time, you have probably heard of this crazy practice. A practice that is illegal!
I’m not going to reveal his name or his company name or his city or anything else that might lead to a labor commission investigation. In fact, if I did reveal, some do-good attorney would probably call me to contact the drivers of the company and represent them. It’s a super big no-no in California. The Industrial Welfare Commission Order 9-2001 Section 8 very specifically says:
Cash shortage and breakage:
No employer shall make any deduction from the wage or require any reimbursement from an employee for any cash shortage, breakage, or loss of equipment, unless it can be shown that the shortage, breakage, or loss is caused by a dishonest or willful act, or by the gross negligence of the employee.
Gross negligence is something that a court probably would need to decide. The law is pretty clear, as much as you would like to charge your driver for damage done to a vehicle, you can’t. Pure and simple; you cannot charge. Why limo operators think they are above the law all the time boggles my mind. If a driver does damage and offers to pay, you better get it in writing because that is the only way you can take money from their check. And, you better make absolutely sure that the employee was not coerced into signing the document or you will find yourself in even bigger trouble for doing that.
In a similar scheme, operators have been known to ask employees to contribute to a “fund” such as an accident deductible fund. Let’s say the company has a $1,000 deductible. If there is a major accident, the money can be taken from the fund to pay it. Or, if the accident is minor and can be paid for by the fund, then the fund is used for that. In this crazy practice, each driver “agrees” to take a certain amount out of his check each pay period, such as $5. It goes into the pot. The pot always has money. Guess who controls the money? Yes, the operator. While you may present it to the new chauffeur as, “this is how we do it and it could benefit you,” it doesn’t wash in court.
You decided to go into business. The risk of operating the business is solely yours. Man up! Don’t try to make your employees pay for unintentional damage unless maybe you want to share your profits with them as well. That’s fair!
— Jim Luff, LCT contributing editor
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