Busting myths about what you can deduct from employees’ wages | CFIB
Manitoba’s Employment Standards Code and the Canada Labour Code have rules about wage deductions. Here, we’ll dispel four myths about when you can and cannot reduce your employees’ pay cheques.
Generally, you are allowed to deduct from wages for:
- Items required by law (income taxes, EI premiums and CPP premiums)
- Payments authorized by a court order (garnishments)
- Cash advances or over payment of wages
- Something the employee has agreed to in writing that directly benefits them (savings plan contributions, group insurance premiums)
Approximately 90% of Manitoba workplaces under provincial rules should review the Wage Deductions Factsheet.
The other 10% (from the grain industry, air transportation, aircraft operations, highway transportation, communications) on the list of federally-regulated workplaces, fall under the Canada Labour Code and can read the Deductions from Wages Pamphlet and the Interpretation Guideline.
Here are four common myths about wage deductions:
- MYTH: When hiring employees, you can have them sign a pre-authorized statement to cover damages they may cause.
- FACT: Costs of faulty work or damage, such as broken tools or customers’ “dine and dash” can’t be deducted. A blanket authorization signed to cover the possibility of damages and costs caused by an employee is not valid.
- MYTH: Fines when employees drive company vehicles through red light cameras or photo radar zones are considered business expenses and can’t be deducted from wages.
- FACT: A traffic offence from image-capturing enforcement systems can be deducted if the employee committed the offence and voluntarily authorizes the deduction in writing. You must obtain the employee’s consent for each ticket. Advance blanket authorizations for red light or photo radar tickets are not valid.
- MYTH: Deductions are allowed for personal safety equipment and company-specific uniforms.
- FACT: As the employer, you are responsible for these items, with some exceptions for personal safety headwear and footwear, and cannot require employees to cover these costs.
- MYTH: When recouping a pay advance given to an employee, an employer can add interest or a service charge.
- FACT: Deductions for pay advances can only be for the amount of the advance. You cannot add interest, service charges or fees. When the advance is given, the employer and employee should agree on how and when repayment will happen