“My employee owes me money. Can I just take it out of their wages?”

"My employee owes me money. Can I just take it out of their wages?”

Our answer

You can’t just settle up what you think an employee owes you out of what you owe them in wages. Jersey’s employment law is clear that as an employer you are obliged to pay wages in full, except for deductions required by law and deductions made under an agreement.

The best thing to do is to ensure that your Contracts of Employment contain a well drafted Deductions clause. If you don’t have that then the only way in which you can do it is by the specific consent of the employee at the time you need to settle what is owed. You should record this consent in writing and have the employee sign it. You will also want to record it on the face of the payslip, and pay close attention that you have made the right Tax and Social Security deductions.

If you do have a Deductions from Wages clause, that’s good but its not the end of the story. The deduction will need to be reasonable; within the scope of the clause; and it’s a very good idea to give timely notice to the employee of the deduction so they can make financial arrangements.