Legal Question in Employment Law in California

Your employer may have committed extortion by threatening you. If you truly did not take the money, you may want to send a certified letter to your employer stating that you did not take it, that the video tape shows you did not take it, and demand that he stop threatening to send you to jail if you don't pay him. If he doesn't stop, you can file a police report claiming that your employer is extorting you. DO NOT threaten your employer by telling him that you will file a police report if he doesn't stop, because you may be extorting him. Good luck.

If threatened with criminal charges, you'd be smart to hire an attorney to intervene now, before this gets out of hand. They are not handling this properly, and are possibly committing extortion. But so would you be if you threatened them the same way. The attorney may be able to determine if they actually have enough evidence to bring charges against you, and could resolve this without that happening.