Most people would agree that the correct payment of wages is the very least they can expect from their employer. Sadly, there are occasions where this most fundamental aspect of employment is abused or neglected. So what is an “unlawful deduction of wages”, and what legal protections exist to stop it happening?
The definition of an “unlawful” deduction is anything that is taken from an employees’ wages without their explicit, written consent. A lawful deduction is therefore anything which the employee has consented to, or which the employer is obliged to deduct from their workers’ wages, ie, tax and national insurance.
Unlawful deductions are specifically prohibited by the Employment Rights Act 1996. What this means in practice is that the employer cannot just take money from peoples’ wages, even if it’s owed to them. For example, if the employee is overpaid in one month, the employer cannot go ahead and take the money back from the next month’s wages – they would still need to get written consent.
This doesn’t stop employers from recovering their money, of course. What it does prevent are the sort of arbitrary deductions from wages that could lead to abuse by unscrupulous employers. It is also worth noting that wages in the legal sense mean any form of payment that relates to employment, including fees, bonus and commission payments and holiday pay. All of these types of payment are protected by the unlawful deduction of wages provisions.
Something else to consider is that it’s sometimes easier to treat an equal pay claim as an unlawful deduction of wages claim, rather than pursuing it under sex discrimination rules.
If you suspect that an unlawful deduction has been made from your wages, you must get legal advice as soon as possible. Contact our specialist employer tribunal solicitors on  422300 or e-mail firstname.lastname@example.org – you may be entitled to make an employment tribunal claim for compensation.
Alternatively, you might want to visit our employer tribunal claim website which is packed with information about employment dismissal claims including claims for unlawful deduction of wages.