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When can employers lawfully deduct from employee wages?

One of three conditions has to be met for an employer to lawfully make deductions from wages or take payments from a worker. The deduction or payment must be:man looking to question marks

  • required or authorised by legislation (for example, income tax or national insurance deductions)
  • authorised by the worker’s contract – provided the worker has been given a written copy of the relevant terms or a written explanation  of them before it is made
  • consented to by the worker in writing before it is made.

There are exemptions from these conditions which allow an employer to recover, for example, an earlier over payment of wages or expenses to a worker.

If you are investing in staff training and development and want to protect your investment for the benefit of the company we would recommend a specific Training Agreement be put in place between the employer and employee.  This training agreement should cover specific considerations such as;

  • The course/training title
  • The length of time the agreement will remain in force
  • The cost of the training and amount to be deducted if the employee leaves employment
  • Any additional course specific costs which are included i.e. travel expenses and cost of study material

In addition to the financial information it is also worth covering some more practical considerations as part of this training agreement.  For example if the training is being carried out at a school or colleague should an employee report to work when the training establishment is closed?

If you need help on this or any other HR matter please do not hesitate to contact the Employment Team on 01302 341344.

By Louise Addison Dip Mgmt (Open) Assoc CIPD – HR Business Partner

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