Pay Slips – Wage Deductions and Associated Employer Responsibilities

The Payment of Wages Act, 1991 forces employers to provide a pay slip in respect of all employees. A pay slip is a statement in writing that outlines the total pay before tax (gross pay) and all details of any deductions from pay. The employer’s responsibility regarding the required provision of pay slips is set down in Section 4 of the Act.

The Act protects against unlawful deductions from employee wages.

Here are the important points for employers to remember:

-Employee wage deductions must be authorised by either the employee’s contract of employment or by written consent of the employee – a trade union subscription, for instance.

-An exception to this is where the employer makes a deduction from pay when there is a need to recover an overpayment of wages or expenses.

-There is an obligation on the employer to make a deduction from an employee’s wages if they are required by a court order to do so – an example of this might be an Attachment of Earnings order in a family law case, for instance.

-The employer is entitled to make a deduction if the employee is due to make a payment to the employer –An example of this would be if expenses arose due to the employee being on strike.

On the other hand an improper deduction made by the employer is one which is not authorised.

-(Income tax, universal social charge and PRSI contributions are a separate category as they are compulsory deductions required by law).

-Where the deduction from wages arises because of either an act or omission of the employee – till shortages or breakages, for instance, or the supply of goods to the employee by the employer (cleaning of uniforms, perhaps) – then the amount of the deduction must be fair and reasonable.

-The amount of the deduction must not exceed the loss experienced or cost of the service.

-The deduction must take place within 6 months of the loss/cost occurring.

Failure to pay all or part of the wages due to an employee is considered an unlawful deduction and a complaint can be made under the Payment of Wages Act. Similarly, unpaid notice, holiday pay, bonus and commission payments can also form part of a claim under the Act.