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When can I deduct money from an employees salary?

View profile for Natasha Johnston
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There are a variety of reasons a deduction from salary may be required, for example, a one off payroll error or you may fund an expensive training course for an employee and they leave the company shortly after completion. Whilst in many scenarios you may be able to act lawfully in recovering these monies from salary, you can be left in hot water if you make a deduction that is unlawful.  

Tips to strengthen your position and prevent an unlawful deduction from wages claim:

  • Provide for recovery of monies in the contract of employment, ensuring the wording is specific
  • Ensure you consistently enforce the term of contract to avoid claims of less favourable treatment in individual cases
  • Write to the employee once an overpayment or recovery is identified clearly setting out the repayment terms
  • Where provision is not accounted for in the contract of employment, draft an agreement to seek an employee’s express permission to recover the monies prior to authorising training courses or incurring costs
  • Ensure the recovery is reasonable and obtain HR and legal advice as appropriate where a proposed deduction is disputed

If you would like to discuss the contents of this article further, please feel free to contact Natasha Johnston on 01792 525478 or by emailing: natasha.johnston@jcpsolicitors.co.uk.  

Natasha is an HR Advisor within JCP's HR Services team. The team provide outsourced HR support and ongoing advice and guidance to the firm's business clients. Natasha’s experience includes providing HR advice and guidance on complex HR issues such as attendance, grievance, capability and disciplinary matters.  Natasha can also provide advice and support on policy drafting and implementation, TUPE and Redundancy processes. 

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