When An Employee Loses A Laptop, Phone Or Other Device, Who Should Pay?

Here’s a little quandary for you to consider: If you have employees using company-owned laptops, phone or other devices, who’s responsible for replacing them if they get lost, stolen or damaged? This is a sticky question and one that needs to be addressed BEFORE Joe walks into your office to sheepishly admit he’s left his laptop at Starbucks last night.

Under federal law, an employer has the right to deduct the costs of a lost or damaged device from their employee’s paycheck PROVIDED that deduction doesn’t drop the employee’s compensation below minimum wage. However, California considers the loss and damage of electronic devices to be a cost of doing business and will only allow you to charge back your employees if they were negligent. Other states may have similar laws – so the first thing you should do is check with an attorney who specializes in employment law for your state to know what you can and can’t do.

Next, decide what your policy is going to be on this topic and communicate that in writing to your employees. It should outline what care they should take with company-owned mobile devices as well as the consequences of losing or damaging them. Yes, the term “policy” makes us all cringe, but it’s important to make sure you and your employees have a written understanding of what your expectations are, as well as what their responsibility is.

A BIGGER Loss To Consider

The cost of replacing a lost device is actually insignificant compared to the bigger cost and risk of the data it contains. Of course this opens up another can of worms all employers need to think about – security on mobile devices. And since some employees are using their OWN devices, you’ll need to think through what the rules are for company owned AND employee owned devices. (Aside, putting your data in the cloud can help).

But one thing is for sure: if you and your employees are storing sensitive information like passwords, credit card information, client or patient data on mobile devices, extra care MUST be taken to ensure the security of that data if the device is stolen. As always, if you need help in determining what your policy should be and how to secure mobile devices, give us a call. This service is free to all Total Care clients.