Can I hold an employee’s final paycheck if they fail to turn in company equipment or required paperwork for expense reimbursements?

No. Employers may not withhold a final paycheck for failure to return company property or submit expense reimbursement paperwork.

All earned wages — including accrued, unused vacation or paid time off — must be paid on the last day of work, or within 72 hours if the employee quits without sufficient notice.

Employers may not deduct amounts from wages for the employer’s benefit, such as lost equipment or paycheck reissuance costs. The Division of Labor Standards Enforcement (DLSE) considers these costs of doing business.

Employers may instead require employees to sign property acknowledgments and pursue recovery through small claims court, as well as discipline employees for failing to return property.

Expense reimbursements may be paid according to the employer’s policy or schedule and are not required to be included in the final paycheck. Employers may require timely submission of reimbursement documentation and should clearly communicate submission deadlines and payment schedules.

Employees should be reminded at termination to submit any outstanding expenses by their last day.

However, employers must reimburse expenses once documentation is received, even if submitted late, after quitting or being terminated. Under the California Labor Code, employees generally have up to three years to claim reimbursement.

Read about Final Pay in the HR Library.