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Wages are fundamental to any form of work but there are common issues that can arise. Fortunately, we can help remedy the situation.

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Understanding wages

The definition of Wages under the Employment Rights Acts is “any sums payable to the worker in connection with his employment”. This includes bonus payments, commission, holiday pay, sick pay and various other statutory payments. Some of the payments not included in the definition of wages are benefits in kind, loan agreements and expenses incurred during the course of employment.

The amount of wages you receive for the work you undertake should be agreed with your employer and written in your contract of employment. The amount you receive should also be at least the National Minimum Wage. Although your wage should be set in your contract, it is still open to negotiation and can be changed at any time through mutual agreement with your employer.

If your employer refuses to pay you the wage that you agreed upon, one way to remedy this is to bring a claim for unlawful deductions from wages in the employment tribunal.

If it is found the deduction was made unlawfully then your employer will be ordered to repay you the amount of money that was unlawfully deducted from you. Employers can deduct money from their employees in very limited circumstances, such as:

  • When they have the right to do so in your contract of employment
  • When they have previously obtained your written permission to do so
  • When a statutory provision requires it e.g. income tax and national insurance

Examples of deductions we often see are for poor work standards, negligence causing loss, and shortfalls in cash or stock. Another notable and very common deduction that your employer can make is to recover an overpayment of wages. They will need to show that an overpayment has been made, but if they can then they will have the right to recover it.

However, if your employer decides to recover an overpayment from you, they should be careful that by doing so they don’t breach the implied term of trust and confidence in your contract. They should consider the impact on your finances, discuss the overpayment with you and look at a repayment plan as an option if the deduction has been ongoing for a long period of time.

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