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Find out which deductions from employee earnings are allowed and which aren’t.
The Code allows certain legal deductions to be made from an employee’s earnings. The amount of each deduction, and the reason for the deduction, must be listed on the employee’s pay statement.
Employers can deduct from an employee’s earnings if the deduction is:
When they start their job, employees can agree in writing to deductions for:
Employers can, with written authorization from the employee, reduce the employee’s wages below the minimum wage by a maximum of:
An employer is not allowed to make some deductions under any circumstances. Deductions an employer is not allowed to make under any circumstance include those for:
No employer may reduce the wage of the employee to pay for uniforms. Deductions for uniforms aren’t allowed. This includes any costs associated with the purchase, use, rental or cleaning or repair of a uniform, or any other special article of wearing apparel that an employee is required to wear during the their hours of work. If an employer deducts earnings for Personal Protective Equipment (PPE), this would fall under Deductions and Earnings section 12 (c) and requires the written authorization of the employee.
Under the Occupational Health and Safety Code, employers are required to provide respiratory protective equipment to workers when needed. For other types of PPE, employers must ensure that workers use the equipment (i.e., does not stipulate that the employer must provide). In practice, employers often pay for all PPE. In some industries such as construction where workers sometimes switch between employers frequently, workers are often expected to provide their own safety boots, hard hats and work gloves.
Deductions for faulty work aren’t allowed. Faulty work includes any act or omission of an employee which results in a loss to an employer.
Examples of faulty work include accidental damage to an employer’s vehicle or equipment and mistakes in production.
Deductions for cash shortages or loss of property can’t be taken from the employee’s earnings if other persons have access to the cash or property. This includes access by the employer or their representative, other employees, or customers.
In cases where cash is involved, the employee must be allowed to count their float, account for their sales, and finalize their accounting of the cash. Unless these conditions are met and the employee provides written authorization, the employer can’t make deductions for cash shortages or loss of property.
Examples of cash shortages, loss of property include failure to collect payment such as walkouts in a bar or restaurant, gas-and-dash at a service station, or breakage in a restaurant.
Section 12 of the Employment Standards Code limits the deductions that employers are allowed to make on an employee’s pay.
Disclaimer: In the event of any discrepancy between this information and Alberta Employment Standards legislation, the legislation is considered correct.
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