Unlawful Deductions From WagesPosted in : Essential Guide to Employment Contracts on 24 May 2022
Unlawful deductions from wages (“UDW”) are commonplace and yet it’s an area of HR that many businesses get wrong. Businesses often then leave themselves open to Tribunal claims from their staff for the deductions from wages that they make.
Businesses can be liable for unlawful deductions claims even in circumstances where they had a legitimate reason to make the deduction. Except in cases of mistake, deductions from wages by a business are only permitted in one of these three instances (Article 45 Employment Rights (NI) Order 1996):
- required by law. The scope of this is limited but is most commonly seen in the deductions for income tax and national insurance contributions;
- authorised by
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This article is correct at 24/05/2022
The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.