Posted on September 12th, 2019
Below is a full transcript of this video.
What’s going on, fellow entrepreneurs? Today, I want to talk about employee mistakes.
So I had a call from a client. Basically, one of their employees made a horrific, negligent mistake that cost him a lot of money … Well, cost the company a lot of money.
And he didn’t want to fire the employee. But what he wanted to do was deduct the cost of the equipment that was ruined against the employee’s paycheck or have some sort of agreement with the employee for the employee to pay back the company, because it was a real bonehead mistake and it was a real expensive piece of equipment.
But unfortunately, the law doesn’t allow for that.
There’s nothing in the law that requires the employee to be the insurer … I’m sorry, the … Yes, the employee to be the insurer of mistakes that the employee makes.
So it was very difficult to convince this client that the only remedy is whatever discipline he was going to impose, whether that was termination or whatever else, whatever the thousand other types of discipline you can impose.
But the way that I convinced him was telling him a personal story about me, when I first started doing well enough to hire.
So when I first was doing well enough to hire, I hired someone that was even more experienced than me. I had a better business background, and he was just a better litigator at that time anyway.
And so, he made a mistake, a really big mistake that cost me about $90,000. And my first inclination was to start deducting that from his check. Because at the time I was doing more commercial litigation, I wasn’t so involved in labor and didn’t understand that that was a big no-no.
So as I looked into it … And he agreed to it too … As I looked into it, I realized that it wasn’t something that I could do anyway.
So basically, at the end of the day, I had to eat the $90k. He’s the employee. I’m the employer. And it was painful. But you know, he was a good enough employee at the time, where I just ate the $90k and moved on.
So, unfortunately, as an employer in California, that’s what you’re required to do. If an employee costs you money by making some mistake, whatever that mistake is, whether big or small, your only remedies are whatever disciplinary remedies you would have anyway for any other type of wrongdoing.
Now, of course, if it’s criminal, then besides terminating them, you can press charges or whatever.
But at the end of the day, bottom line is employees are going to make mistakes. And as the employer, California law requires you to eat it.
Okay. So till next time, do well.
