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Part III of the Canada Labour Code (Labour
Standards)
1. If my employee owes me money, can I just take it out
of his pay?
Not without written authorization from the employee. If the
employer and employee agree that the money is owed and the employee
agrees to have the money deducted from his pay, obtaining a written
authorization is easy. However, when the parties disagree, the
employer can't use his position to unilaterally decide that the
money is owed and pay himself out of the employee's wages. Normally,
parties who disagree about money owed are required to go through the
civil court process to have the matter judged by an impartial third
party. The Code sets out what amounts can be deducted from
an employee's wages.
2. What can be deducted from an employee's pay cheque?
- deductions required by federal or provincial law such as taxes
and employment insurance premiums
- deductions authorized by a court order such as child support
garnishment or by a collective agreement such as union dues
- overpayments of wages
- specific amounts authorized in writing by the employee*
* Even with a written consent, an employer can't deduct amounts
for property damage or loss of money if any other person had access
to it.
3. Can I simply have my employee sign a statement that he
will be responsible for any damage he causes?
A blanket authorization is not valid. In order for a written
authorization to be valid, it has to show the exact amount being
deducted, and be signed at the time that the deduction is made. In
this way, the employee understands what he is signing and how/when
it will affect him.
4. What about monthly insurance premiums? Does the
employee have to sign an authorization every month?
No. For regular payments such as charitable donations, savings
plans contributions, medical and dental plan premiums, life
insurance and long term disability premiums, pension plan or RRSP
contributions, the signed authorization should set out the amounts
of the deductions, the purpose and the frequency of the deductions.
5. What if my employee refuses to sign an authorization
to deduct tickets he received under the Highway Traffic Act?
Tickets and fines can only be deducted from an employee's wages
if that employee gives written consent. If the employer feels that
the employee is responsible to pay them, an alternative is civil
court.
6. Can the employee be forced to sign an authorization?
The employee's consent must be voluntary. In the event of a
complaint investigation, the inspector will look at the
circumstances under which the authorization was signed. If it is
found that coercion was used, the inspector may find that the
authorization is not valid.
For information only. For interpretation and application
purposes, please refer to Part III of the Canada Labour Code
(Labour Standards), the Canada Labour Standards Regulations,
and relevant amendments.
Additional copies of this publication can be obtained from:
Public Enquiries Centre
Human Resources Development Canada
140 Promenade du Portage, Phase IV, Level 0
Gatineau, Quebec
K1A 0J9
Fax (819) 953-7260
www.hrdc-drhc.gc.ca
�Her Majesty the Queen in Right of Canada, 2002
Cat. No. MP43-345/13-2002-1
ISBN 0-662-6733-7
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