Deductions from pay and all the legalities!
I’ve been told on many occasions by payroll professionals over the years that employees become mathematical geniuses when it comes to deductions of any perceived discrepancy in their pay whether based on fact or not. While this may indeed be the case, the law does make it extremely difficult for employers to make authorised deductions from an employee pay aside from PAYG without: the specific authority of the employee; a provision specified in the relevant award or agreement; or a condition specified in the contract of employment that allows the employer to make deductions from monies due to an employee under reasonable circumstances. For instance, many employers would be surprised that it is illegal to make deductions from an employee pay in circumstances such as shortfalls in cash experienced by an employee in the course of employment (unless authorised by an award, see below); fines imposed by employers on employees for breaches of company policies or practices or for such matters as lateness to work; recovery of monies owing from a private loan; recovery of monies caused by damage to company property. Such monies can only be recovered by deduction from the employee’s pay by agreement with the employee. A few examples of reasonable deduction may include: where an employee fails to give appropriate notice on termination the cost of items purchased on a corporate credit card for personal use by the employee the cost of personal calls on a company mobile phone the cost of petrol purchased for the private use of a company vehicle by the employee. It really is a minefield and an area where employers should seek advice from the TTIA before proceeding with payroll deductions if there is even the slightest of doubt. The TTIA Employers Hotline can be accessed on 02 9264 0011. from 1 July 2018. The high income threshold will increase to $145,400 per annum, effective 1 July 2018. The previous threshold was $142,000 per annum until 30 June 2018. The high income threshold is the amount by which a category of employee is excluded from the unfair dismissal provisions of the Fair Work Act, and in relation to the guarantee of annual earnings relating to modern awards. The increase in the threshold affects a number of different provisions under the Fair Work Act, including: an award/agreementfree employee’s eligibility to claim unfair dismissal; the maximum amount of compensation of six months’ earnings that the Fair Work Commission can order an employer to pay to an employee deemed to have been unfairly dismissed; and the level an employer can guarantee an employee’s earnings which renders the provision of the applicable modern award no longer applicable to the employee. This can be a complex area, particularly issues in relation to what part of an employee’s package can be attributed to the threshold figure. Employers who are unsure with regard to an employee’s award coverage or access to unfair dismissal are always advised to contact the TTIA Employers Hotline for advice and assistance (02 9264 0011).