Where the employer is engaged in a trade, occupation or business where the practice of making deductions or requiring deposits is recognized, to answer for the reimbursement of loss or damage to tools, materials, or equipment supplied by the employer to the employee, the employer may make wage deductions or require the employees to make deposits from which deductions shall be made, subject to the following conditions:
- That the employee concerned is clearly shown to be responsible for the loss of damage;
- That the employee is given reasonable opportunity to show cause why deduction should not be made;
- That the amount of such deductions is fair and reasonable and shall not exceed the actual loss or damage; and
- That the deduction from the wages of the employee does not exceed 20% of the employee’s wages in a week. (Section 11 - "Deductions for loss or damages." Implementing Rules of the Labor Code of the Philippines, Rule VIII: PAYMENT OF WAGES, Memorandum Circular No. 2, November 4, 1992)
