Unlawful deductions from wages
As experienced employment lawyers in Scotland, we guide employees through workplace legal issues such as unlawful deductions from wages.
From the classification of wages to making a successful claim, and more, we’re here to provide clarity and find a fair and legal resolution.
What are unlawful deductions from wages?
An unlawful deduction from wages is when you are partially paid, or not paid, for work you’ve carried out. This applies to part-time and full-time employees and covers your contractual pay, underpaid commissions, some unpaid bonuses, and untaken holiday pay.
Unlawful deductions from wages go against The Employment Rights Act of 1996 (ERA), which is in place to protect workers from non-consensual pay deductions. The legislation states that a wage deduction can be deemed illegal if you don’t agree to it, if it isn’t in your contract, or if it isn’t required or authorised by law.
What are classed as wages?
Wages are an all-encompassing term that includes the following:
- Your salary
- Holiday pay
- Some workplace bonuses
- Sales commission
- Maternity and paternity pay
- Adoption or shared parental pay
- One-off payments like overtime payments
- Workplace benefits (that have a specific monetary value).
The term also includes statutory payments such as sick pay in lieu of wages for time off, guarantee payments, and trade union duty payments.
What are not classed as wages?
The ERA 1996 sets out that the following are separate from wages because they have no connection with the provision of services:
- Redundancy payments
- Pension contributions
- Wage/payment advances for a loan.
It’s also not possible to claim for an unlawful deduction from wages where the deduction relates to an overpayment of wages or expenses.
Can your employer legally deduct any wages without consent?
Your employer can deduct wages without consent for a limited number of reasons. The first is that the deduction is required or authorised by legislation. This may include income tax, national insurance, or student loan repayments.
The second is that the deduction is stipulated in your employment contract. If this is the case, you’ll need a written copy of your employment terms, a verbal or written explanation for the wage deduction, and you’ll need to agree to it in writing.
Pay cuts are also legal, but employees must formally consent to them and be given an explanation as to why they’re being implemented.
Resolving wage-related issues
Most wage disputes can be resolved informally with a conversation between you and your line manager. You can also seek clarification from the company’s accounting and HR teams if your pay is less than it should be. They will likely explain the discrepancy.
How to make an unlawful deduction from wages claim
Most of the time, issues with your wages are misunderstandings and can be resolved informally and simply. If your employer provides a clear explanation and your money is paid, there’s no reason to pursue the matter further.
If the issue can’t be resolved, you can raise an internal grievance, which can be done while you’re employed at the company.
If an internal grievance doesn’t result in full payment, you may be entitled to bring a claim to an employment tribunal, as long as the claim is for a specific sum of money.
An Employment Tribunal claim must be started within three months less one day of the payment due date or the date of the last payment if multiple payments are due. Wage dispute claims also must have sufficient evidence such as emails, contracts, payslips, timesheets, and bank statements.
Because unlawful deductions from wage claims involve a breach of contract, a claim can also be made in the Sheriff’s Court. The time limit for such claims is 5 years from the date of the breach. However, the process tends to be more expensive than an Employment Tribunal, and it carries more risk of having to pay the employer’s legal expenses if the claim fails.
How we can help
Unlawful deductions from wage claims can be complex and difficult to resolve without professional legal guidance. Our comprehensive approach gives you a better understanding of your circumstances and can work towards resolving issues without going to a tribunal.
So, if you need guidance or assistance with a potentially unlawful deduction from wages, we’ve got your back.
Get in touch with Allan McDougall Solicitors
If you have questions about unlawful deduction from wages, need clarification about where you stand legally, or anything else, don’t hesitate to contact the employment law experts at Allan McDougall Solicitors.
Contact us
- Email us
- Call free on 0808 560 0872
- Arrange a callback by using our enquiry form
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