When is an employer in B.C. able to make deductions from an employee’s wages?
Section 21 of the British Columbia Employment Standards Act (ESA) states that except as permitted by provincial or federal legislation, “an employer must not, directly or indirectly, withhold, deduct or require payment of all or part of an employee’s wages for any purpose.”
It also states that an employer must not require an employee to “pay any of the employer’s business costs.”
If an employer requires an employee to pay its business costs, the employee is able to recover those amounts following a complaint to the Employment Standards Branch.
There are many examples of practices that violate this provision. Examples include deducting from an employee’s pay the cost of a uniform required at work, deducting cash shortages, or requiring a restaurant employee to pay for broken dishes.
Requiring employees to provide a cash float for making change to customers is generally prohibited since it is the cost of doing business.
The cost incurred by an employee to use a cell phone for the employer’s business purposes is also generally considered to be a business cost, to be paid by the employer.
Employers must take certain legislated deductions from an employee’s pay. This includes deductions for the Canada Pension Plan, Employment Insurance and income tax. Depending on a worker’s category, there may be other allowable deductions. These are generally permitted.
Employers are required to honour court orders to garnishee an employee’s wages.
If the employer has a written assignment of wages, it must make payroll deductions for union dues, tax deductible donations to a charity, tax deductible payments to pension or superannuation plans, payments required under the Family Maintenance Enforcement Act; and payments to an insurance company for medical or dental coverage.
Employers must keep a record of each deduction from the employee’s wages and the reason for it for a period of 4 years.
If an employer overpays an employee’s wages, the over-payment cannot be deducted unilaterally from future wage payments. An employee may provide written consent to deductions of over-payments, to permit an over-payment to be repaid through deductions.
Employers who believe they may have violated these provisions ought to seek counsel. Employees who are concerned that their employer may not be complying with these provisions should contact the Employment Standards branch, or an employment lawyer. Unionized employees should immediately contact their union.
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