The primary piece of legislation that governs workers in British Columbia and sets minimum standards for working conditions is the Employment Standards Act, RSBC 1996, c 113 (the “ESA”).
Section 21(1) of the ESA prohibits employers from directly or indirectly, withholding, deducting, or requiring payment of an employee’s wages for any reason, except as permitted by law.
Legally required statutory deductions include:
- Federal income tax
- Federal Employment Insurance premiums (EI)
- Canada Pension Plan contributions (CPP)
- A court order to garnish wages
If an employee agrees in writing, deductions can also include:
- Medical premiums
- Repayment of payroll advances
- Purchases made from an employer
- Accidental overpayments
Sections 22 to 24 of the ESA require employers to honour an employee’s assignment of wages, which includes an employee’s written authorization to pay all or part of an employee’s wages to another person.
If an employee has given written authorization, an employer must make payroll deductions for:
- Union dues
- Donations to a charity if the amounts are tax deductible
- Payments to pension or superannuation plans if the amounts are tax deductible
- Payments required through the Family Maintenance Enforcement Program
- Payments to an insurance company for medical or dental coverage (e.g. Medical Services Plan coverage or extended health and dental benefits)
- Payments to debtors, such as credit card companies, banks, or collection agencies
Subsection 21(2) of the ESA prohibits employers from requiring an employee to cover any business costs.
Examples of expenses that cannot be deducted by an employer include:
- Stolen or damaged company property
- Cash shortages
- Poor quality of work
- When a customer doesn’t pay
If an employer requires an employee to pay for business costs, Employment Standards can:
- Recover the money as unpaid wages
- Fine the employer $500 to $10,000
Know Your Rights and Responsibilities
Whether you are an employee or an employer wondering what can or cannot be deducted from a paycheque, it is important to have effective legal support.
If you need assistance or want to discuss this issue, reach out to us! We want to help.
