An employer is prohibited from making any deduction from an employee’s wages without the employee’s specific authority and, even then, when this authority is obtained, such deduction can only be made for the purpose of paying a third party, for the benefit of the employee in accordance with the Fair Work Act.

Authorised Deductions

Under s.324 of the Fair Work Act it provides that an employer may deduct an amount payable to an employee if:

  • The deduction is authorised in writing by the employee and is principally for the employee’s benefit;
  • The deduction is authorised by the employee in accordance with an Award or Enterprise Agreement; or
  • The deduction is authorised by or under a law of the Commonwealth, a State or a Territory, or an order of a Court.

Unlawful Deductions

Some examples of deductions from an employee’s wages by an employer that could breach the Fair Work Act include:

  • Deductions to cover shortages from cash registers;
  • Cost of training courses provided to an employee where the employee is directed to attend by the employer;
  • Cost of a mobile telephone provided to the employee for work-related use;
  • Cost of tools and equipment supplied to an employee for work purposes;
  • Cost of damages to the employer’s assets (including motor vehicles);
  • Cost of breakages or accidents; and
  • Cost of an employee’s uniform.

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Disclaimer

The information provided in this knowledge base article is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.

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