An employee requested a personal loan from the company he/she worked for and signed a written agreement stating repayment schedule. The employee failed to pay back the loan on time as promised and kept asking for extensions and revised repayment plan. The employee still couldn't keep up with the newly revised repayment plan and now is leaving the company. Can the company take the remaining balance from the employee's final paycheck and/or other benefits like business expense reimbursement, cell phone reimbursement, car allowance, etc?
Generally, the answer is no. California does not allow an employer to deduct such items from an employee's final paycheck. An employer generally must invoice the employee, take them to small claims courts, etc.
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