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Should Permissible Payroll Deductions Be Expanded?

British Columbia’s Employment Standards Act governs the range of payroll deductions which are permissible. Aside from the normal statutory deductions, the range of allowable deductions is extremely narrow and is jealously guarded by the Employment Standards Branch. I have to wonder whether the Branch is being too stingy in the categories of deductions it allows.
 
The first rule for employers to understand is that all deductions must be permitted by the Act or by some other statute of B.C. or Canada.   Any other deduction or payment out of the employee’s wages is prohibited.
 
The types of normally permissible deductions are listed in the Act. Employers may make deductions which are required by any statute of B.C. or Canada. This includes, for instance, the usual deductions for income tax and for employment insurance and Canada pension plan premiums.
 
The employer must make deductions, in limited circumstances, when the employee has made a written “assignment” of wages. An assignment is merely the employee’s written direction authorizing a deduction or payment.
 
These include assignments to a trade union pursuant to the B.C. Labour Relations Code or to a charitable organization or pension plan if the amounts are deductible for income tax purposes under the Income Tax Act.  The assignment can also be to satisfy a maintenance obligation under the Family Maintenance Enforcement Act or to an insurance company for medical coverage. An employee may also request that the employer honour an assignment of wages to satisfy a credit obligation.
 
Employers must never make any sort of a deduction which is for the purpose of paying any of its own costs of doing business. An employee must not be asked, for instance, to pay any costs related to damage, breakage, or loss. They are also not required to pay for special clothing such as uniforms (including cleaning).
 
A deduction from wages to make up for employee theft is also prohibited. The employer must, instead, avail itself of the courts and the normal remedies available to creditors seeking reimbursement. This would apply as well to employer claims against employees for negligently damaging the employer’s equipment, failing to return tools, making unauthorized calls on the employer’s cellular telephone, etc.
 
This brings me to my point, which is that in circumstances when the employer seems to have an employment-related claim against the employee, the Branch should adjudicate that claim. Usually, the reason why the Branch is involved to begin with is because the employee is claiming money from the employer. In that event, why should the Branch not resolve the employer’s counter claims so that, in the end, all matters in dispute between the employee and the employer are resolved?
 
Instead, the Branch seems to have taken the very narrow view that it will rule on the employee’s claims against the employer (arising out of the Act) but it usually will not consider the employer’s claims against the employee.
 
The employer is left with the very unsatisfying option of commencing a civil action to recover what might only be a few hundred dollars. The costs and time associated with pursuing a civil action mean that, in most instances, the employer won’t bother.
 
That routinely leaves employers frustrated and wondering whether they are getting a fair shake from the Branch. That’s reason enough, on its own, for the Branch to reconsider the range of payroll deductions it will permit. 
 

Robert Smithson is a partner at Pushor Mitchell LLP in Kelowna practicing exclusively in the area of labour and employment law. For more information about his practice, log on to http://www.pushormitchell.com/.