What may I do about employees who fail to return company property when they leave my employment?

Employers are generally responsible for providing and maintaining tools, uniforms and equipment necessary for employees to perform their jobs.

Although state wage orders allow deductions for unreturned property, courts likely would rule against employers who withhold final pay for this reason. Employers may not deduct the cost from the employee’s final paycheck.

A recommended practice is to use a property return agreement for all new hires and current employees receiving company equipment. The agreement should list the item and its value, require the employee to return the property at termination and note that failure to return it may result in legal action. While you cannot deduct costs from pay, signed acknowledgment increases the likelihood of property being returned.

Itemize all equipment or tools provided, including identifying numbers and approximate value. When issuing replacements, update the agreement to reflect returned items and any new property provided.

Read more about Employee Debts, Loans and Deductions in the HR Library.

Q&As