Generally deductions cannot be made from an employee’s wages, except in the following circumstances:
- employee has given their written consent
- provided for in employment agreement
- court directs that deduction can be made
- union fees
- bargaining fee arrangement
- deductions required by law (e.g. child support payment)
- collective agreements can set out deductions
- if board or lodging are provided (15%for board or 5% for lodging)
Written consent can be withdrawn
Even if the employee has given written consent for a deduction from wages some caution needs to be applied as it is possible for an employee to change their mind. A case Narbey v Fire Security Services (Auckland) Ltd, ERA Auckland, AA104/09, 2 April illustrates this point. The Fire Security Service had an agreement in writing to deduct the cost of training from wages if Mr Narbey left within 12 months of employment. After 9 months of employment Mr Narby gave written notification “I withdraw your Authority for any deductions to be made by Fire Security from any wages and holiday pay owed to you”. Accordingly, it was found that the employer was not entitled to make the deduction it had, and was ordered to repay the sum deducted, along with interest on the amount at the rate of 5% per annum.