Recent amendments to the Wages Protection Act have introduced more extensive criteria which Employers must meet before they can make deductions from any Employee’s wages.
Amongst others, the deduction must be for a lawful purpose, it must be reasonable and the Employee must have agreed to the deduction in writing.
It was previously understood that Employers could simply rely on general deduction clauses in their agreements. However, there is now a requirement for consultation with the Employee and gaining their specific consent for every deduction an Employer may wish to make in the future. Having general deductions in an agreement which do not require Employees to carefully consider, review, and sign each possible deduction are unlikely to be enforceable.
Our new Employment Agreement Templates now have a new separate and individual Schedule; Authorised Deductions. This lists each specific deduction an Employer may wish to make and ensures that each deduction is specifically considered and agreed to. The Schedule also provides a record of the Employee’s consent. Our recommendation is that Employers need to make sure that the deductions in Schedule 4 are discussed with Employees and the Employee initials consent to each deduction listed.