Ok it seems illegal but I wanted to be sure.

The person receives a printout of there intended check earnings for there hours but are paid by personal check less a damages fee???

So it turns out damage from an employment situation that insurance would normally cover was taken out of the check. A similar situation happened with a car accident with another employee who was then billed for the damage instead of the company using there insurance. Yes all the situations noted happen in /on work time with work equipment.

Legal??

Generally speaking, nope. In this particular situation, it's possible, but only if the accident can be proven to be the employee's "gross negligence" and even then, it's iffy at best. Follow the hyperlinks through to the IWCs and exceptions.
http://www.dir.ca.gov/dlse/FAQ_Deductions.htm