Can Restaurant Owners Charge Employees For Mistakes?

As busy as restaurants can get, it is inevitable that not everything is going to function perfectly. Eventually, an employee might make a mistake. This causes a certain question to arise: can restaurant owners charge employees for mistakes?

Under federal law, there are rules regarding the legality of charging employees for mistakes. Small mistakes can be charged to the employee as long as the pay deduction does not reduce their pay below minimum wage. In more costly cases, different problems may arise.

Continue reading to learn the specifics regarding whether restaurant owners can charge their employees for mistakes. Much of the employer’s decision might be based on personal judgment, while certain circumstances might need to be left up to the law.

Can Employees Be Charged For Mistakes?

Whether the instance is overly costly or not, employees can be charged for mistakes. The seriousness of the situation determines which steps are to be taken, but under federal law, an owner can charge an employee for mistakes. 

However, keep in mind that certain state laws can override federal law, meaning that depending on the region you are in, these rules might be different.

There are several states which, under the Occupational Safety and Health Act, might have different rules dealing with charging employees for mistakes, so it is a good idea to do your research on the state you are in. However, federal law permits restaurant owners to charge employees for personal mishaps at the most basic level. Below is a more in-depth explanation of the legality behind these rules.

Are Employees Legally Liable For Mistakes?

As you already know, federal law allows an employer to charge their employees for mistakes. However, there are restrictions on this privilege. While employers might have a bit of freedom in deciding whether they want to charge their employees for mistakes, they can not approach the situation however they want to.

The main aspect of this circumstance involves employees – like restaurant workers – who are likely earning minimum wage. As long as the cost of the damage done while working does not reduce an employee’s paycheck below minimum wage, it is legal for an owner to charge an employee. 

So, if an employee is making more than minimum wage, whether it be based on their hourly pay, additional tips, or anything else, the employer can charge an employee for mistakes that do not reduce the employee’s paycheck to less than that of minimum wage.

If an employee is making minimum wage, it is a bit of a slippery slope. Since charging them for mistakes would reduce their pay below minimum wage, a restaurant owner would not be able to charge them. In some states, however, employees can be charged for mistakes – even if it temporarily reduces their paycheck below minimum wage – if they consent in writing that the cost of the mistake was as a result of their doing, and they agree to pay for it.

Other states, like California, have more concrete restrictions on charging employees for mistakes. In California, an employer cannot charge an employee for mistakes under any circumstance involving deductions for cash register shortages, broken dishes, and more. 

Below are more specific guidelines surrounding what employees can or cannot be charged for.

Can You Charge Employees for Uniform Costs?

Restaurant owners can charge an employee for the cost of wearing a uniform and having it cleaned, as long as the charge does not bring an employee’s pay below minimum wage. In some states, there are restrictions on this rule. 

For example, certain states like New Jersey do not allow employers to charge employees for uniforms if the uniform has the restaurant’s logo on it and does not count as streetwear.

Cash Register Shortage And Broken Restaurant Equipment

As said earlier, federal law states that an employee can be charged for cash register shortages and broken equipment at the restaurant. Still, as in most other cases, the charges cannot bring an employee’s pay below minimum wage. In some states, an employee must admit responsibility and consent to pay the charges. If they do not, an employer cannot charge them.

States such as California completely prohibit deductions like these unless the employer can prove that the employee’s mistakes were made willfully or overly negligently. Again, it is important that if you have further questions, you should look up the rules for the specific state in which you are curious.

Charging Employees for Debt Deductions

Oftentimes, an employee might request an advance on their paycheck. Considering that this counts as a loan from their employer, a restaurant owner can legally withhold money from their paycheck until the debt is paid back. In fact, federal law states that this can be done even if the deduction causes an employee’s pay to fall under minimum wage.

Certain states have stricter rules that either prohibit an employer from loaning money to an employee or requiring the consent of the employee that they accept the deductions until the debt is paid back.

Charging Employees for Licenses And Certifications

New employees at a restaurant might be required to pass certain classes to earn certifications in certain positions, such as a bartender or server. While not all establishments are required to employ people with these credentials, it is not uncommon. For new employees, there are no laws stating that an employer must pay for these classes, though several restaurant owners choose to do so.

For existing employees needing new or updated certifications, federal law requires employers to pay the employee their usual hourly rate while completing these training courses.

There are other circumstances in which an employer might feel inclined to charge their employee for a mistake, but the situations listed above are run into most often. It cannot be stressed enough that you learn the specifics of restaurant owner-employee regulations in the state in which you work.

Can An Employer Sue An Employee For A Mistake?

If you work at a restaurant, you might be wondering whether a serious enough mishap can result in your employer suing you. Similarly, if you own a restaurant, you might want to know whether a serious problem can be dealt with through a court of law. In extreme circumstances, an employer can sue an employee for extreme negligence or intentional/willful choices.

If a restaurant owner tries to take an employee to court for breaking a plate, the judge will likely laugh them out of the courtroom. For minor damage such as this, most employers understand that the mistake was just that: a mistake, an accident. And in most cases, employees are smart enough not to let it happen again.

However, the circumstance can be much more serious. Suppose a restaurant owner finds that one of their employees has been intentionally overcharging at the register but keeping the additional money. It is no secret that if this happens over and over again, it is not a mistake on the employee’s part.

For repeated, extreme negligence or willful choices, an employee can be sued. If the cost of damage is sufficient enough, a restaurant owner might choose to take it to court. Even in extreme accidents, such as an employee starting a fire and damaging a large part of the restaurant, it can be taken to court. Though it may not have been intentional, it can be considered extreme negligence.

As a restaurant owner, you should not be too worried about major mistakes or willful choices causing extensive losses of money. In most cases, you, as an employer, will do a fine job of hiring trustworthy employees that care about the work they do to make the money they need. So, while it should not be a major concern, it is still something to be aware of.


Under federal law, restaurant owners can charge employees for mistakes. However, state laws might have certain restrictions of alterations to the rules making these laws up. Whether an employer charges an employee for mistakes is both up to the employer’s personal choice and federal and state regulations.


The information in this article is purely informative and for educational purposes. No information is a guarantee for success. I AM NOT A LAWYER! Always check with your professional advisors and local authorities, especially your business’s legal and financial requirements.


You Want To Open A Restaurant But Have No Idea Where To Start From?

Discover In This Free Report What You Should Know Before Spending A Penny!

You Want To Open A Restaurant, But Have No Idea Where To Start From?

Get my book ” The Ultimate Guide To Opening A Restaurant Business” and discover all you should know about this industry before spending a penny.