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Ask Our Specialist –  Can You Charge Employees for Damaged Equipment?

Published February 13, 2018 (last updated May 20, 2022) - NZ Operations Manager

As the nature of the workplace evolves, employers increasingly provide employees with phones, laptops, vehicles or highly technical machinery – but what happens if that equipment is cracked, damaged, or lost – can employers recoup the costs?

Generally, the answer in no. There is an implied indemnity in every employment agreement which means the employer is responsible for the damage or loss that is caused in the ordinary course of employment. So, if something happens to the equipment unintentionally, it is just one of those things and the employer would not generally be able to recover for the costs.

However, the situation is slightly different if the employee has deliberately damaged equipment. If the employee has intentionally damaged or negligently lost equipment, it is arguable, you may be able to bring a claim against your employee in those circumstances. It may be possible to investigate the incident for serious misconduct.

If employers are concerned about the potential cost they could incur if an employee damages expensive material, they should include specific provisions in the employment agreement. While provisions in the employment agreement do provide some form of protection to employers, they are certainly not bullet proof.

Best practice is to have the equipment covered by an insurance policy.

For advice on how to manage your workplace with the right policies in place, contact Employsure on 0800 568 012.

About Employsure

Employsure is one of New Zealand’s largest workplace relations advisers to small and medium businesses, with over 5,000 clients. We take the complexity out of workplace legislation to help small business employers protect their business and their people.

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