Following on from last week’s report of scams and the continuous proliferation of counterfeit notes it is timely to advise members under what circumstances they are permitted to deduct amounts due to negligence by staff. In essence, the ability of the employer to deduct the amount of the error from wages can only be done if it is an agreed part of the employee’s contract. Furthermore, can only be done for the amount that is a loss (there can be no additional punishment attached), must take into account the amount of wages earned by the staff members ( it may be necessary to spread the repayments over an agreed period of time) and the employee must be notified in writing, in advance of the unintended allocation of the deduction. This is covered by Section 5 of the Payment of Wages Act 1991, you can see the relevant section below.
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