Tool Allowances & Paying for Your Own Tools
Many trades expect workers to bring their own hand tools, and tools can cost thousands of dollars. Whether your employer has to pay or reimburse you depends on federal wage law, your state law, your contract and your agreement. Know the rules before you buy, and before anything is taken from your pay.
- Trades
- Mechanics
- Apprentices
- California
The federal rule: minimum wage and overtime
The Fair Labor Standards Act (FLSA) requires that covered workers receive minimum wage and overtime “free and clear.” Under Labor Department rules (29 CFR 531.35), an employer can’t make workers pay for tools or equipment that are primarily for the employer’s benefit if that brings their pay below the minimum wage, or cuts into overtime they’ve earned.
- If you pay for required tools, or if the employer deducts the cost from your paycheck, and it leaves you with less than minimum wage that week, that’s generally a violation.
- Employers also can’t require you to buy tools with a “kickback” that cuts your pay below minimum.
- These rules protect the minimum. For workers earning well above the minimum wage, federal law often doesn’t require the employer to pay for tools. A mechanic or carpenter earning a high wage may be expected to supply hand tools.
State laws
Some states go further. For example, California requires employers to reimburse employees for necessary work expenses, which can include tools they require. Other states restrict deductions from pay, or require written permission. Many states have no tool reimbursement law at all. Check your state labor department and see State Labor Law Table.
Typical arrangements
- Worker supplies hand tools; employer supplies power tools and equipment. This is common in many trades and by industry custom.
- Tool allowance: a per-hour or weekly amount paid to workers who bring their own tools. Some union contracts set it. Ask whether it’s added to your pay or part of your base wage, and whether it counts for overtime and benefits.
- Employer-provided tools: required safety tools and specialty tools are often supplied by the employer. Some employers expect you to pay a deposit.
- Apprentices often get lists of required tools. Ask who pays. See Apprenticeships.
Safety and tools
- OSHA requires employers to make sure all tools, including tools workers supply themselves, are in safe condition (1926.300 and 1910.242). See Tagging Out Damaged Tools.
- Employers generally must pay for required PPE, with exceptions. See PPE Hazard Assessment.
- Don’t use a damaged or unsafe tool to avoid replacing it. Ask your employer to provide a safe one.
Deductions and lost tools
- Ask for the tool policy in writing before you start
- Don’t sign a deduction authorization you don’t understand
- Keep a list and photos of your tools, with serial numbers
- Ask about secure storage and whether the employer covers theft on the jobsite
- Check your pay stub for unexplained deductions
Tools stolen from a jobsite are often not covered by the employer. Homeowner or renter insurance may not cover tools used for work, but you can buy a tool floater or inland marine policy. See Wage Theft if money is taken unlawfully.
Taxes
Since 2018, most employees can no longer deduct unreimbursed work expenses on their federal tax return. Some workers, like certain armed forces reservists and some performing artists, can. If you’re an independent contractor, tool costs are usually deductible business expenses. Ask a tax professional.
If something seems wrong
Contact your state labor department or the U.S. Department of Labor Wage and Hour Division (1-866-487-9243). See Where to Get Help and Minimum Wage.
Standards & references
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