Employment Law

Authorized and unauthorized pay deductions

Authorized and unauthorized pay deductions

By on Jan 19, 2016 in Pay deducations |

Pay deductions are included in legal protection of the employees, and unless they are
authorized and justified, paying-employees-with-cashit is considered unlawful that your pay and wages are reduced without a legitimate reason. Not only that full-time employees of a company are protected from unauthorized pay deductions, but the same protection is granted to apprentices and contract workers. For all information you can contact  san francisco Employment law attorney.

First of all, it is important to make a difference between pay and wages. Pays include the amount of money paid to you by the employer, in relation to your job. Wages are the pay rate for an hour or a month, i.e. the amount of money you should be paid. Wages include: all fees, bonuses and commissions related to your job, statutory payments (such as payments received during maternity leave), and all vouchers that can be exchanged for money, services or gods (such as lunch vouchers).

Wages do not include: pension and redundancy payments, payments in kind, tips, loans and payments of expenses incurred in employment. This is important to know because if your employer makes an automatic-deductions-money-skyunauthorized deduction from a sum that does not fall under the category of wages, you are not allowed to take legal action (expect if the employment contract forbids the employer to perform such deduction). If the unauthorized deduction is made on the sum that falls under wages, you are allowed to take legal action.


Pay deductions are authorized and justified in certain conditions, and this are:

• When the deduction is required by law (student loan repayment, taxes and the like)
• When you and the employer make a contract concerning the deduction and you agree on it by signing it
• When your employment contract allows it
• When it comes as a result of statutory disciplinary action
• When a public authority requires a statutory payment
• When you have been absent from job because of taking part in a strike
• When the deduction is made to cover previous accidental overpayment
• When the deduction comes as a result of a court order or decision.
In these instances, if there comes to pay deduction, you are not entitled to taking legal action.