ARTICLE · 20 DECEMBER 2013

Deductions from wages or salary: when are they permitted under the Fair Work Act?

Hunt & Hunt

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Employers must understand their obligations, as unlawful deductions can expose an employer to a range of civil penalties.

AustraliaEmployment and HR

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Many employers do not understand the circumstances in which they are permitted to make deductions from their employees' wages, particularly in situations where the employer seeks to recover money which they believe the employee owes to them.

Under the Fair Work Act 2009 (Cth) (Act), amounts payable to an employee in relation to the performance of work must be paid in full and at least monthly.

There are very specific provisions in the Act regarding the circumstances when an employer can make deductions from an employee's wage or salary and it is important for employers to understand their obligations.

Unlawful deductions expose an employer to the imposition of civil penalties, which range up to $10,200 for an individual and up to $51,000 for a corporation.

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