It is unlawful for an employer to make deductions from an employee’s wages or underpay them, unless the employer has the employee’s agreement to the deduction or underpayment in writing. This agreement also needs to be signed by the employee themselves.
The only deductions that are permitted without agreement in writing are those that are required legally, for example deductions for tax and NI at source and overpayments of wages.
This will be the case even if the employee owes the employer money.
What to do if an employer makes a deduction without your agreement
If an employer makes a deduction that is not agreed by the employee, you will be able to pursue the employer in either in the employment tribunal for unlawful deductions from wages, and/or breach of contract. In the case of the latter, an employee could bring a claim in the civil courts for breach of contract.
Bonus claims can also be particularly valuable to an employee and require a very careful analysis of the provisions that have been agreed between employer and employee. Often, an employer will state that a bonus is completely discretionary and non contractual, however this may not be the case if the bonus is paid regularly and/or based on measurable factors or goals.
In the employment tribunal, the employee will have 3 months less a day from the last deduction of wages.
Specialist settlement agreement solicitors
Instead of bringing a claim in the employment tribunal or court, you could also consider trying to negotiate a settlement agreement with your employer. We have a wealth of experience in successfully negotiating settlement agreements.
Get in touch with an expert member of our Employment Law team today for more advice and guidance on what to do if you’ve been unpaid, underpaid, or have had unauthorised deductions made to your wages .