The Wages Protection Act requires employers to pay employees in full on their pay day, without deduction except as the law allows.

One circumstance in which an employer might be able to make deductions from an employee’s pay is where the employee has resigned without giving the required notice period.

Most employment agreements have clauses that require an employee to work for a certain amount of time before they finish with the employer. Often this is between 2 and 4 weeks.

If the employer wants to make any deductions, it must have a deduction clause in the employment contract. The clause may allow the employer to recover losses incurred from the employee failing to work out their notice period.

Deduction clauses, and the deductions made, must not be out of proportion. In one example, the Employment Relations Authority held that a deduction clause that allowed the employer to deduct 4 weeks wages was not lawful. Instead, it described the provision as a penalty, which is unlawful.

In order to deduct wages, employers must ensure that there is a specific clause in their employment agreements, and that the clause is reasonable, otherwise they will not be able to rely on it. If the employer makes the deduction regardless, they may face an expensive grievance.

If there are concerns about a deduction clause in an employment agreement, or if an employer has withheld your final pay, it is wise to speak with a professional experienced in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-priced Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.