It is often the case that staff will approach their manager requesting an advance or a loan to be paid back through a deduction from their wages. As a small business, most clubs will accommodate this request if at all possible, but what is the legal position? Under the Employment Rights Act, 1996 one of the three conditions below has to be met for an employer to lawfully make deductions from wages or take payments from a worker. The deduction or payment must be: required or authorised by legislation (for example, income tax or national insurance deductions) authorised by the worker's contract - provided the worker has been given a written copy of the relevant terms or a written explanation of them before it is made consented to by the worker in writing before it is made. There are exemptions from these conditions which allow an employer to recover, for example, an earlier overpayment of wages or expenses to a worker. The law protects individuals from having unauthorised deductions made from their wages, including complete non-payment. This protection applies both to employees and to some self-employed workers. There are extra protections for individuals in retail work that make it illegal for an employer to deduct more than 10 per cent from the gross amount of any payment of wages (except the final payment on termination of employment) if the deduction is made because of cash shortages or stock deficiencies. More details of unauthorised deductions can be found by following this gov.uk link. Workers who believe they have suffered an unlawful deduction from wages should initially take it up with their manager and/or HR/payroll department. If this doesn't resolve the matter, recourse may be made to formal internal procedures. Only if all else fails should a complaint to an employment tribunal be considered. The introduction of The Deduction from Wages (Limitation) Regulations 2014 means that if an employee makes a claim for backdated deductions from wages for holiday pay, a two-year cap will be placed on all claims that are brought on or after 1st July 2015. This means that the period that the claim can cover will be limited to a maximum of 2 years.
This is member only content
Please LOGIN to read the full
Not a member? Please click here to join today.