BWF members such as yourselves frequently use our Member and Technical Helplines for assistance on a wide range of Employment, Health and Safety, Contractual and Technical issues. We’re putting up a frequently asked question every Tuesday in order to help members and illustrate the type of advice we are able to provide. If you have any questions that you would like to see featured, we would be happy to assist. This question and many others like it can be found in our Question Centre. If you want further advice on any of the issues, don’t hesitate to ring the helpline or browse our extensive publications library, which includes our ‘Discipline in Employment’ guide, redundancy guidance, age discrimination advice, procedures for dealing with ill health absences, and, of course, the BWF’s Employee Handbook. This week: In what circumstances can I deduct costs from the wages of an employee? The legislation prevents an employer from making deductions from an employee’s wages other than in certain defined circumstances. There are three specific situations where lawful deductions may be made. These are: (a) where the law requires deductions to be made, e.g. income tax, National Insurance contributions, attachment of earnings orders, student loan deductions,
(b) where the employment contract makes specific provision for a deduction, and
(c) where both parties have agreed in writing to the deduction before the situation arises that would require the deduction to be made. It should be noted that these situations all have two things in common: (a) the employee knows in advance that a deduction may be made in certain circumstances, and
(b) authority for the deduction and the circumstances under which it may be made are set out in writing. Employers occasionally overpay their employees, therefore it would be useful to consider a clause such as the following for possible inclusion in contracts of employment: – (NAME OF COMPANY) reserves the right to make deductions from pay in the event of lateness, unauthorised absence or overpayment of wages. An employer must ensure that the above provisions are drafted correctly. As a cautionary note to employers, if a Tribunal orders an employer to repay any amount to an employee on the basis that there was an invalid deduction, the employer then loses the right to recover the money in any other way at all