1. My secretary has damaged the computer in my office and I intend to deduct $3,000 from her salary this month for compensation. Can I make this deduction? When will I be entitled to deduct salaries from my employees?
You probably cannot deduct $3,000 from her salary because you are prohibited from making such deductions unless you have obtained the written approval from the Commissioner for Labour, or under the following circumstances:
- Deductions for absence from work. The sum to be deducted should be proportionate to the period of time that the employee is absent from work.
- Deductions for damage to or loss of the employer’s goods, equipment or property by the employee’s neglect or default. In any one case, the sum to be deducted cannot exceed $300. The total of such deductions must not exceed one quarter of the wages payable to the employee in that wage period.
- Deductions for the recovery of any wages advanced or overpaid to the employee. The total sum to be deducted must not exceed one quarter of the wages payable to the employee in that wage period.
- Deductions of the value of food and accommodation the employer supplies to the employee.
- Deductions, at the written request of the employee, in respect of contributions to be paid by the employee through the employer for any medical scheme, superannuation scheme, retirement scheme or thrift scheme.
- Deductions, with the employee’s written consent, for the recovery of any loan made by the employer to the employee.
- Deductions that are required or authorised under any enactment of law to be made from the wages of the employee.
- Deductions for outstanding maintenance payments owed by the employee pursuant to an Attachment of Income Order that has been issued by the Court.
Deductions under items (i) to (vii) have priority over item (viii).
Offences and Penalties
Employers who make illegal deductions from the wages of employees are liable to prosecution and, upon conviction, to a fine of $100,000 and to imprisonment for one year.
Despite the abovementioned restrictions on salary deductions under the Employment Ordinance, employers may try to claim damages/compensation from the negligent employees through civil proceedings.