Megan McArdle points to what seems a rather odd ruling from a California court:
California employers may not dock the wages of low-level employees (called “non-exempt” employees) for things like shoplifting losses, cash shortages and workers compensation costs. Ralphs Grocery established a company-wide incentive bonus program with payouts based on Ralphs’ net income, with “net income” determined according to GAAP to exclude all costs of doing business, including shoplifting losses, cash shortages and workers compensation costs. When Ralphs awarded bonuses to its lower-level employees based on GAAP net income, the court held that Ralphs illegally docked the wages of its lower-level workers for the impermissible charges.
Hmm. My employer pays me a bonus based on a share of net. I got less this past quarter than in the previous one because we netted less. Is that a pay cut?
