Overpayments and Deductions from wages

Our very own Jodie Hill was on Look North a few weeks ago discussing the “payroll chaos” experienced by warehouse workers in Barnsley.

The employer had experienced a payroll issue last year, whereby people were both overpaid and underpaid, and which they were resolving by deducting from wages. Reportedly, the employees were not informed when their wages were being reduced, and some workers were left without enough money to eat, pay for bus fares, and for other living expenses.

As Jodie explained on the programme, legally, if a worker has been genuinely overpaid, employers are entitled to reclaim the overpayment by making a deduction from wages.

Where the purpose of a deduction is to recover an overpayment of wages or an overpayment in respect of expenses, the unlawful deductions from wages regime of the Employment Rights Act 1996 does not apply. It does not matter why the worker was overpaid, but rather it applies where an overpayment is “for any reason”.

However, this is strictly the legal position. Jodie also explained that, as a responsible employer, it is considered best practice to discuss and agree a repayment plan with the employee. Not to do so may breach the implied terms of mutual trust and confidence between employer and employee, and runs the risk of a large number of resignations or grievances.

This communication does not appear to be occurring in this instance, or at least it is not occurring to an extent that employees know where they stand on a day to day basis. Ms Deanne Ferguson, GMB regional organiser, explained “their payslips can be very hard to understand, so in some instances where there’s been an overpayment, workers have not necessarily realised. Then the next month there’s been a big chunk taken out of their wage and all of sudden they’ve got no money left.”

This matter clearly demonstrates the importance of an employer communicating with their employees, rather than simply doing what they are legally able to do. Moreover, the fact that the issue was discussed in local news and we are still discussing it now, shows the potential reputational consequences of not keeping open lines of dialogue with your employees.

 

If you require any assistance regarding deductions from wages, please contact us and we would be happy to help.

Related Articles

Thoughts On “Gagging Orders”

Keep Informed: New case criticises workplace “banter” and awards £54,000 for race and sexual orientation discrimination

Asda’s Employment Contract Changes: Fair or Foolish?

Drugs and Alcohol Policy: Support or Discipline?

Bullying and Harassment in the Workplace

Yorkshire Legal Awards: Diversity and Inclusion Award

Yorkshire Post Excellence in Business: Social Mobility Award

Topic UK Magazine October 2019

Calling Time on the Booze Culture

Mental health discrimination is limiting the opportunities in the workplace for those who have served in the armed forces

Thrive Law positive following trial four-day working week

How to Thrive – Top tips to reduce stress in your organisation

Keep Informed: MacDonald’s CEO dismissed for relationship at work

How to Handle Allergies in the Workplace

Menopause in the Workplace

The 4 Day Week Report

Feeling SAD?

WELLBEING | Thriving Minds at the Civic Hall by Rob Kilner

Surviving or Thriving?

Keep Informed: Women and Equalities Committee proposes changes to enforcement of discrimination rights

The Good Work Plan

Working 9 to 5, 4 Days a Week…?

Is your organisation ready for Generation Z?

Thriving In The Workplace and the #OneMind Petition

Dyslexia in the Workplace

Overpayments and Deductions from wages

The UK’s increasingly diabetic workforce

TheBusinessDesk: Further expansion for law firm; Promotions at engineering specialist; and more

LGBTQIA+ in the Workplace

Eid in the Workplace

Neurodiversity in the Workplace

Leeds & Yorkshire Lawyer Magazine – 11th April 2019

Recruiting Times – 12th February 2019 Employment contracts: What to check for before accepting the job

HR News – 6th February 2019 Over half of working Brits have accepted a job offer without checking the contract first.

HR REVIEW – 5th February 2019 Over half UK workers accepted job offers without checking contract first

Yorkshire Legal News – 12th November 2018

BR Online: Employee wellbeing and human capital – November 2018

MMB Magazine – 5 November 2018

The Telegraph- Business 24 October 2018

H & N Magazine 3 October 2018

South Leeds Life 3 October 2018

The Yorkshire Post 10 October 2018

Article in People Management- “Employers must do more to tackle male ‘stigma’ around shared parental leave” – 30th July

The Business Desk- “Independent law firm launches in Yorkshire”– July 16th

Interview with Ascension Club Leeds- July 11th

Law Society Gazette – 3rd May 2018

Stylist Magazine – 21st May

Yorkshire Post – 2 May 2018 – Greg Wright The Case for introducing mental health first aiders at work

What Is YOUR Workplace Doing for Ramadan?

April Updates in Employment Law

Time to Talk Day 2019

The Loneliness Epidemic

Thrive’s round up of 2018!

To talk or not to talk?

Why employers should exercise caution when using NDAs

Being your true self at work boosts mental wellbeing and performance

How to spot and eliminate risks of office workplace accidents

Why The Best Investment Is In Your Mental Health

Supporting LGBT+ Mental Health in the Workplace

What your employer needs to know when your child has a mental health illness – guest blog

The Do’s And Don’t For A Happy Employee – Guest Blog

HR leading the way into GDPR compliance for businesses

Dealing with stress in the workplace

Welcome to our new website and blog!