Last payday Bob asked for an advance of $500.00, and we gave it to him. He is owed two weeks wages and holiday pay. We were just going to deduct a week's wages for not giving us notice, the $500.00 he owes us, and $200.00 for cleaning the house from his final pay. That’s okay, isn’t it? Give us a call back within 15 minutes if it isn’t.
Cheers, Fred.
And the answer is: No.
The Wages Protection Act 1983 addresses what deductions can be made from an employee’s wages. Under this legislation, an employer must pay the entire amount of wages owing to an employee without deduction. However, an employer may, with the written consent of an employee or on the employee’s request, make deductions from an employee’s wages.
If an over-payment of wages has been made to an employee:
The employer may recover the amount of that over-payment if it was not reasonably practicable for them to avoid making it; and
Before recovering the over-payment, the employer gives the employee notice of their intention to recover it; and
Notice is given within particular timeframes, which are dependant on an employees particular circumstances; and
The over-payment is recovered not later than two months after this notice is given.
However, deductions can only be made from wages or final Holiday pay if written consent of the employee has been given to the employer. Therefore, for example, if an employment agreement (with the appropriate clause) is given to an employee but they have not signed it, then they have not given their written consent to any deductions.
Again if an employee has given their written consent, then deductions can be made from holiday pay before paying them out on the end of their employment.
Hi Fred,
If you had gotten Bob to sign the agreement I sent you, it contained clauses that would have allowed you to deduct money for him leaving without notice, charge him for cleaning the house and deduct it, take back the $500.00. You didn’t, and so you can’t.
Sorry, Mary-Jane
This article originally appeared in the Southland Times Work To Rule column. Mary-Jane Thomas is head of Preston Russell's employment law team. Contact her by clicking here
