Return of Property

“I provide my employees with things like tools and a laptop. Can I deduct the cost of that property from their final paycheck if they don’t return it?”

Your HR Survival Tip

Absolutely not! There are ways to get the company property returned but that’s not one of them. California is very protective of final paychecks and will come after you for not paying the employee on time… because the check would be short. Even if the employee agrees to pay for the property, have them write you a separate check rather than make that deduction from their final paycheck.

Think ahead so you’re not stuck once the employee is leaving your company. Use a Property Return Agreement at the time you are issuing any company property. List each item, the value of that item, and the dates issued/returned. Make sure the employee initials each line item. At the bottom of the form, make it very clear this is your property and is only on loan, with the expectation the employee will return all property in good condition upon request or when leaving the company. Employees tend to take things in writing more seriously than verbal reminders or agreements.

It’s very helpful to have a copy of this completed form ready during the separation meeting. If this is an involuntary separation, provide a copy of the form and ask for the return of your property. If the employee can’t produce the property immediately, make arrangements for the return within 24-48 hours. Schedule a time for the employee to drop it off or provide them with a way to ship it back to you. You have a much better chance of getting the property back if you make it as easy for the employee as possible.

If the employee is trying to keep the property and you haven’t agreed to that, put your “official” request in writing and send it to them by certified letter. Repeat this a couple of weeks later, if needed, but now add “if the property is not returned by within 14 days, we will report it to the police as stolen.” However, unless the property is worth several thousand dollars, it’s unlikely the police will actually do anything. You can report it but stay realistic.

Do what you can to avoid a messy situation by putting a policy and process in place so it’s easy to get your property back. If the employee refuses to return your property and it’s not worth taking them to court, you are stuck writing it off. This is why taking steps early on can save you time and money.

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