Yes, it can. If you take money or property from your employer to cover wages, commissions, or expenses you believe you are owed, California can charge that as embezzlement or another form of theft rather than treat it as a pay dispute. The reason is specific: the claim-of-right defense that protects a good-faith belief in ownership does not cover keeping an employer’s property to offset or pay a debt you say you are owed, or taking property to settle an amount that is disputed or undetermined, which is what a pay dispute usually is.
Embezzlement requires real entrustment, not just a job
Under Penal Code section 503, embezzlement is the fraudulent appropriation of property by someone to whom it was entrusted. Under CALCRIM No. 1806, the prosecution must prove the employer entrusted the property to you because the employer trusted you, that you fraudulently converted or used it for your own benefit, and that you intended to deprive the employer of it, even temporarily. The instruction’s notes add a real limit: courts have held that an employer-employee relationship is not presumed to be a fiduciary relationship “in the absence of other evidence of trust or confidence.” Working for someone does not, by itself, hand you the employer’s cash, accounts, or company card in the legal sense embezzlement requires. That limit changes the theory, not necessarily the risk: Penal Code section 484 also defines theft to include feloniously taking another person’s personal property, so property that was never entrusted to you can still be the basis of a theft charge.
Why taking only what you believe you were owed usually does not work
Penal Code section 511 makes it a defense to embezzlement that the property was taken openly and under a good-faith claim of title, even if that claim turns out to be untenable. CALCRIM No. 1863 puts the claim-of-right defense in jury terms: you must have believed in good faith that you had a right to the specific property or a specific amount of money, and taken it openly. The belief can be mistaken or even unreasonable and still count, though a jury may reject it if you knew facts that made it completely unreasonable.
The limit is written into the statute itself. Section 511 says the defense “does not excuse the unlawful retention of the property of another to offset or pay demands held against him.” That wording is not confined to disputed amounts: it covers keeping an employer’s property to settle any demand you hold against the employer. CALCRIM No. 1863 adds, for theft generally, that the defense “does not apply to offset or pay claims against the property owner of an undetermined or disputed amount,” and a wage or commission dispute is almost always about an amount the employer has not agreed to. The California Supreme Court drew the same line in People v. Tufunga (1999) 21 Cal.4th 935, a robbery case. The court tied the defense to a good-faith belief that the specific property taken is your own, held that it does not extend to forcible takings meant to collect a debt, and noted that section 511 draws the same distinction for embezzlement.
The defense also does not apply if you tried to conceal the taking when it happened or after it was discovered. That matters here because self-help in a pay dispute can easily look like concealment: adjusting your own hours or pay in a system, or holding back cash without telling the employer.
Planning to pay it back later is not a safe harbor
An intent to return the money is not a defense; CALCRIM No. 1806 says so directly. Under Penal Code section 512, that intent is not even a reason to reduce the punishment unless the property was restored before charges were filed. And even actually returning it before charges is not a defense: Penal Code section 513 says it only allows the court, in its discretion, to lessen the punishment. Whatever the amount, embezzlement is punished the same way as theft of property of the same value or kind under Penal Code section 514, not on a separate scale.
What to do with a real wage dispute instead
- Write down the specific amount you believe you are owed and the basis for it, rather than taking property to cover the gap yourself.
- Raise the dispute through the employer’s payroll process, a wage claim, or civil counsel. Those are the lawful paths for resolving a disputed or undetermined amount.
- If you already took money or property and are now facing an embezzlement accusation, bring your documentation of the wage dispute to a defense lawyer promptly. It speaks directly to whether you had fraudulent intent, which is the element the prosecution has to prove, not only to whether you were actually owed money.
If a pay dispute at work has turned into an embezzlement accusation, or you want to understand how a claim-of-right defense applies before you talk to investigators, the Law Offices of David S. Chesley can go over your pay records and the facts with you. Call (800) 755-5174.