Deductions from my salary without my consent – what can I do?

If you are thinking ‘there have been deductions from my salary without my consent – what can I do?’ This blog answers that very question. It will explain what to do if you think you have been underpaid and explore the circumstances in which it is lawful (and when it is not) for an employer to make deductions from an employee’s wages.

 

What to do if you think you have been underpaid

 

1. Review your wage slips

 

Reviewing your wage slips will ensure that it is possible for you to accurately state what you have been paid and when. Gaining this information is particularly important in circumstances when the number of hours you work (and therefore the amount of your wages) is likely to vary each month. This is particularly common when employees are on zero hour contracts.

2. Review any material which shows what and when you worked

 

It can be easy to lose track of the number of hours you have worked. This situation may arise if, for example, you were asked to work at short notice. It is therefore important to keep a note of any hours worked so that you can identify any errors which may have been made relating to what you have been paid.  

3. Review your contract of employment

 

Your employment contract may well specify the circumstances in which a deduction could be made from your wages. By way of an example, deductions could be made for losses incurred by an employer as a result of an employee’s carelessness or negligence (such as receiving a fine for speeding).

The key point here is that there are a number of circumstances when an employer may be entitled to make deductions. However, these should be specified in the contract.  Otherwise, in certain circumstances, an employee could argue that they did not agree to such deductions being made and therefore the deductions were unlawful.

The employment contract is therefore likely to contain useful information regarding whether, and in what circumstances, deductions can be made.

4. Seek to resolve the situation informally in the first instance

It is important to remember that there is likely to be an innocent explanation for what happened. Perhaps there was an admin error, such as hours not being logged correctly. That being so, the best approach is to raise with your employer why you think your wages are wrong, using the information referred to earlier, and to do so in a way which is calm and respectful. By acting professionally, you are increasing the likelihood that the issue can be resolved amicably and therefore are maintaining a positive relationship with your employer.

 

5. Keep a written record

 

As said earlier, keeping a written record of the hours worked is very useful because it ensures that information is accurate and removes the need to trawl through other material searching for the answer.

In addition to the information referred to above, it is also useful to keep a record of events e.g. when the issue was raised, who with, what was the next step said to be?

 

6. Pursue a claim at an Employment Tribunal

 

If the matter cannot be resolved between you and your employer an option would be to bring a claim at an Employment Tribunal. There are strict time limits relating to Employment Tribunal claims. Seeking professional advice, at an early stage, is likely to provide clarity regarding options and potential next steps.

 

Is it legal for my employer to make deductions from my salary without my consent?

 

Yes, but only under very limited and specific circumstances. Some of these limited circumstances are the following:

1. Tax and National Insurance Contributions

 

 Employers are required to deduct income tax and National Insurance contributions from employees’ wages and remit these payments to HM Revenue and Customs (HMRC).

2. Pension contributions

 

 If an employee is enrolled in a workplace pension scheme, their employer is required to deduct contributions from their wages and contribute to the pension scheme on their behalf.

 

3. Repayment of overpayments

 

 If an employer has overpaid an employee due to an administrative error or miscalculation, the employer can generally lawfully deduct the overpaid amount from the employee’s future wages.  

 

4. Salary sacrifice schemes

 

In some cases, employees may agree to participate in salary sacrifice schemes, such as childcare vouchers or cycle-to-work schemes. These deductions are made with the employee’s consent and are therefore not unlawful deductions.

 

5. Court ordered deductions

 

If a court has issued an order relating to, for example, child support or unpaid debts, employers are legally obligated to make these deductions from an employee’s wages.

 

6. Deductions agreed in the employment contract

 

 Deductions that are stated within the employment contract, or a separate written agreement between the employer and employee, are generally lawful.

 

7. Employee loans or advances

 

 If an employee has received a loan or advance from the employer, any agreed repayment deductions are typically lawful if they comply with the terms of the agreement.

Plotkin & Chandler works exclusively in the areas of HR and employment law.

If you are an employee, who would like to discuss bringing an Employment Tribunal claim to, for example, recover deductions that have been made to your wages we can help.

If you are an employer faced with defending an Employment Tribunal claim, or there is a situation which may develop into one, we would be pleased to assist. In addition to our litigation work, referred to above, we also have expertise in drafting contracts which are tailored to the needs of clients.

To discuss your requirements, and the ways in which we can help, call us for a no obligation consultation on 020 3923 8616 or email us at info@plotkinandchandler.com