California Labor Code 221 Overview and Example Scenarios

Legally reviewed by: Jessica Anvar Stotz, JD, MBA

California Labor Code 221 is a short part of California’s labor code that simply states employers may not take wages they have paid their employees back.

California Labor Code 221 Explained in 90 Seconds

The core of California Labor Code 221 is that employees can’t take wages back from their employees once they have been paid. The Labor Code specifically says that it is “unlawful” for employers to do so, meaning that a violation of the code permits employees to pursue an action against the employer.

Exceptions to the Rule (Keep Your Eye Out for These!)

Although California Labor Code 221 seems absolute in its language, there are limited exceptions where an employer may be able to deduct wages from their employee which have already been paid. For example, some deductions are explicitly authorized by other laws. Court orders can be used to deduct wages from an employee, and wage garnishments can be used for the same purpose. A more common form of wage deduction is for pre-agreed to benefits, like an employee’s health insurance.

Errors like overpayment can also result in a “deduction” from an employee’s wages, although this deduction is actually a correction of the error. Even in overpayment situations, employers cannot always simply deduct the excess from the employee once it has been paid. These situations will be context-dependent, so if you find yourself in an overpayment situation, it may be in your best interest to seek legal advice.

When You Suspect a Violation

As an employee, staying aware of your wages can keep you from being exploited by your employer through wage deductions. If you notice that your wages start appearing lower than they should, or your employer explicitly says that they may have to cut your pay for one reason or another, you should be aware that your employer might be violating California Labor Code 221. Finding unexplainable deductions in your paycheck may also be a sign that a violation is taking place.

It is vital for employees to take precautions against violations like these. Keeping track of paystubs each time you are paid may help you spot discrepancies between payments and keep track of legitimate deductions.

What to Do if Your Employee Tries to Take Back Pay

If you notice that your employer is attempting to take back pay, employees should politely but firmly let their employer know that doing so is a violation of California law. Ideally, this resolves the situation, and no actual wage deduction takes place.

If an employer is nonresponsive to polite confrontation and actually engages in wage deduction, an employee’s next step should be to contact the California Division of Labor Standards Enforcement (DLSE) to file a wage claim. These can be submitted on the DLSE’s website online, via the mail, via e-mail, or in person. Employees should be ready to produce some documentation, like the name and address of the employer who has committed the violation and payment information like paystubs.

Alternatively, an employee whose wages have been improperly deducted by their employer can consult with an employment attorney and determine their next steps from there. An experienced employment attorney will know how to best navigate a claim and help provide the aggrieved employee with being compensated.

Your Rights Matter – Get What You’re Owed

Being paid without fear of improper deductions is arguably one of an employee’s most fundamental rights. California Labor Code 221 is in place to protect this right. Employers can face monetary penalties for improperly deducting from their employee’s wages, and those penalties are often then given to the employee as compensation. You may also be able to layer penalties, such as the “waiting time penalty” provided by California Labor Code 203 if you have also been fired (or quit) from the position you were withheld wage payment from.

Example Scenarios

Example 1: Employer Improperly Deducts Wages from Employee

• Scenario: An editor receives his paycheck and realizes that he has been paid 20% less than his previous paycheck despite working the same number of hours and receiving no justification for the payment. The employer admits that they deducted the wages to cover other expenses within the company that month.
• Violation: Improper deduction of wages from employee.
• How Labor Code 221 Protects: California Labor Code 221 provides that an employer will be punished in such a situation for improperly deducting wages from their employee. Other expenses incurred by the company cannot justify withholding or deducting wages from any individual employee.

Example 2: Employer Makes Deductions from Employee’s Paycheck Pursuant to State Health Insurance Law

• Scenario: A bank teller is newly hired by a bank and receives his first paycheck. The bank teller believes the employer to have made improper deductions based on his estimate of where the wage should be. He confronts the employer about this.
• Violation: No violation; employers can deduct from employee wages for proper things like health insurance.
• How Labor Code 221 Protects: As a proper deduction, Labor Code 221 does not have an impact on this situation. If the deduction was improper, it would apply and allow the employee to bring an action against the employer.

Example 3: Employer Mistakenly Overpays Employee

• Scenario: A fast-food worker is accidentally overpaid by her employer due to a mistake in the system the employer uses to track hours worked. The employer seeks to deduct these wages since they were the product of a mistake.
• Violation: Possible violation of California Labor Code 221, depending on the nature and justification of the deduction.
• How Labor Code 221 Protects: Generally speaking, under Labor Code 221, employers cannot deduct wages from their employees. However, legitimate mistakes may permit employers to deduct the additional (mistaken) portion of an employee’s wages. These situations will depend on individual facts, and an employee would be well served by seeking legal advice in such a situation.

Resources for Employers and Employees

1. California Labor Code 221
2. California Labor Code 203
3. California Department of Industrial Relations
4. California Department of Industrial Relations – Division of Labor Standards Enforcement
5. California Department of Industrial Relations – Division of Labor Standards Enforcement: Deductions

Connect with an Attorney

Employment attorneys help protect the rights of employees provided under California laws like California Labor Code 221. If you have noticed wage deductions from your paychecks or have been approached by your employer about having your wages reduced for improper reasons, you should contact an employment attorney today. Wage claim cases can be time-sensitive, and receiving legal advice is the best way to know whether you have a case that you should bring. LawLinq provides an attorney referral service that gets you in touch with an experienced employment law attorney who can help you! Contact us today by calling (855) 997-2588 or by filling out an online form!

About the Author

Jessica Anvar

California Consumer Litigation Attorney Jessica Anvar, Esq. is the Founder and Managing Partner of Lemon Law Experts California’s leading lemon law firm. She has multiple years’ worth of experience working with both state and federal lemon laws. Her practice focuses exclusively on consumer protection cases. Ms. Anvar received her J.D. from Loyola Law School. She also earned a Master of Business Administration degree from Loyola Marymount University. Jessica is very active in her local legal community and has helped thousands of clients across the state of California. She has an outstanding record as a true advocate for consumers.