If an employer wishes to make a deduction from your pay, you must be informed of this in writing, detailing the full amount owed and a demand for payment must be requested.
Employees, workers and certain other groups are protected from employers making unauthorised deductions from their pay and wages.
For fixed deductions, if your employer does not detail this in your payslip, you must be issued with a standing statement of fixed deductions.
This statement must:
- Be written
- State the amounts and intervals when the deduction is made
- State the purpose or description of the deduction
- Be issued before your first payslip
- Be updated every 12 months as a minimum
You should be notified in writing of any changes to your fixed deductions. Your employer may only make a deduction from your pay or wages in certain circumstances.
These include:
- If it is a requirement or allowed by law, e.g. National Insurance, tax or student loan repayments
- You have agreed in writing to a deduction
- It is stated in your contract of employment
- It is as a result of statutory disciplinary proceedings
- There is a statutory payment due to a public authority
- You have not worked due to taking part in a strike or industrial action
- It is to recover an earlier overpayment of wages or expenses
- It is a result of a court order or Employment Tribunal decision
Some employers may request that you agree in writing to a deduction, for example if you work in a restaurant and a customer leaves without paying, this may be deducted from your pay or wages. However, this agreement must be written and signed prior to such an event in order for your employer to make wage deductions.
For some employees, this agreement may already form part of their contract of employment, therefore a copy of which must have been issued before your employer can make any deductions.
If you work in retail (shop or restaurant) you have additional protection against deductions from your wages. In the event that there is a shortfall in the till or a stock shortage, your employer may not take more than 10% of your gross wages for a pay period. Therefore, your employer may need to make deductions over a period of time in order to recover the shortfall etc.
If you need advice about an employment matter,
contact Legal Advice Helpline on 0845 600 6980 to speak to one of our specialist advisors about employment law.