Attorneys James T. Carey and P. Zachary Stewart

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Unveiling FLSA Wage Violations: Deductions for Cash Shortage, Breakage, and Inventory Loss

by | May 11, 2024 | Overtime And Wage Issues

The Fair Labor Standards Act (FLSA) is a collection of federal laws that serve to protect workers’ rights. However, despite its clear provisions, some employers still ignore the FLSA, particularly regarding wage deductions. Among the most common violations are those pertaining to deductions for cash shortage, breakage, and inventory loss. In this blog post, we’ll delve into these violations, exploring their implications and providing illustrative examples.

Understanding FLSA Wage Violations

The FLSA sets forth strict guidelines regarding minimum wage and overtime pay, aiming to ensure fair compensation for employees across various industries. Central to its provisions is the prohibition of wage deductions that would effectively reduce an employee’s earnings below the minimum wage.

Cash Shortage Deductions

One prevalent form of FLSA violation occurs when employers deduct employees’ wages to cover cash shortages. Imagine a scenario where a cashier is held responsible for any discrepancies in the cash register at the end of their shift. If the register is short $20, the employer may deduct this amount from the cashier’s wages, effectively paying them less than the minimum wage for their hours worked.

Example: Sarah works as a cashier at a convenience store. Despite her diligent efforts, the cash register occasionally comes up short at the end of her shifts. Her employer deducts any discrepancies from her paycheck, arguing that it’s her responsibility to ensure the register’s accuracy. As a result, Sarah’s earnings dip below the minimum wage, constituting a clear violation of the FLSA.

Breakage Deductions

Another common violation involves deductions for breakage or damage to company property. Employers may deduct such costs from employees’ wages, again pushing their earnings below the minimum wage threshold.

Example: David works as a server in a restaurant where he occasionally breaks glasses while clearing tables. His employer then deducts the cost of these breakages from his paycheck. Despite David’s hourly rate, these deductions result in him earning less than the mandated minimum wage, violating the FLSA.

Inventory Loss Deductions

Employers sometimes resort to deducting employees’ wages to cover losses incurred due to inventory shrinkage or theft. While such losses are a legitimate concern for businesses, passing the financial burden onto employees through wage deductions violates the FLSA.

Example: Maria works in a retail store where inventory shrinkage is a persistent issue. Her employer implements a policy that holds employees financially responsible for any missing inventory in their respective departments. As a result, Maria’s wages are routinely docked to cover these losses, plunging her earnings below the minimum wage threshold and constituting an FLSA violation.

Damages for FLSA Violations

Damages awarded for Fair Labor Standards Act (FLSA) violations, such as minimum wage violations, include unpaid wages, liquidated damages (equal to the amount of unpaid wages), and attorney’s fees and court costs. Unpaid wages encompass the difference between what the employee was paid and what they should have been paid under FLSA requirements, including minimum wage and overtime pay. Liquidated damages are often awarded as a form of compensation for the delay in receiving proper wages. Additionally, prevailing employees are typically entitled to recover reasonable attorney’s fees and court costs incurred in pursuing legal action against the employer for FLSA violations. These damages aim to compensate employees for financial losses suffered due to the employer’s noncompliance with FLSA regulations and to deter future violations.


In the pursuit of maximizing profits, some employers resort to unlawful practices such as deducting employees’ wages for cash shortages, breakage, and inventory loss. However, such actions not only violate the Fair Labor Standards Act but also undermine the fundamental principles of fair compensation and employee rights.  The United States Department of Labor also says that employers cannot avoid these types of minimum wage violations by having the employee reimburse the employer in cash for the cost of such items, instead of of deducting the cost directly from the employee’s wages.

Call Us Now For Help

As guardians of justice, it’s imperative for law firms to advocate for the rights of workers and hold accountable those who flout labor laws. Through awareness, education, and legal action, we can strive towards a workplace where every employee is treated with dignity and receives the wages they earned and rightfully deserve.

If you believe your employer has failed to pay you all the wages you have earned, call Carey & Stewart, PLLC now at 304-914-3577 to schedule a free and confidential consultation.  You can also contact us online.