Q&As

Can an employee bring an unlawful deduction of wages claim where the employer purports to make a deduction from an employee's pay for (a) tax or National Insurance contributions or (b) employee pension contributions, but the employer deducts more than is required or does not pass the amount deducted on to HMRC or the pension provider as required?

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Published by a LexisNexis Employment expert

Published on: 05 December 2019

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Under section 13 of the Employment Rights Act 1996 (ERA 1996), an employer cannot make any deductions from the Wages of a worker unless:

•
the deduction is required or authorised to be made by virtue of:
1. ◦
  a statutory provision, eg the requirement to make deductions for income tax or National insurance contributions via Pay As You Earn (PAYE), or
2. ◦
  a relevant provision of the worker's contract, eg where the employer provides a loan to the worker and has a contractual right to take money out of the worker’s wages in repayment, or
•
the worker has previously signified in writing his agreement or consent to the deduction (eg in respect of pension contributions)

Separately,

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Jurisdiction(s):

United Kingdom

Key definition:

Wages definition

What does Wages mean?

A statutory definition that establishes what constitutes the 'wages' of an employee for the purposes of the Employment Rights Act 1996.

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