Should employers be entitled to deduct training and other costs from salary on termination of employment?
The following recent case involving an employee and training costs to which this happened has given rise to the question along with the issues concerning National minimum wage regulations.
The recent case involved an employee who received a deduction from her final salary payment due to training costs she owed which resulted in her being paid less than the minimum wage. In this case the deduction from her pay was not included when calculating whether she had received less than minimum wage, following previous agreement from the employee that she would pay back part of the training costs if she left her job within two years’ time from that training. Following this deducted payment the HMRC issued a notice of underpayment against the employer who then appealed to an employment tribunal. The tribunal result was that although the deduction made the payment look as if it was below the NMW, it fell within one of the exceptions in the Minimum Wage Regulations 1999 which allows deductions in respect of the worker’s conduct or other event related to conduct of which he is contractually liable. The employer had therefore paid the NMW.
Most employers that pay for training or similar costs only seek repayment if an employee resigns or is dismissed for gross misconduct. An employer who deducts an employees’ wages when the employee is not at fault, such as where an employee is dismissed for redundancy or due to business reorganisation, could result in the employer breaching National Minimum Wage laws if pay is under the MNW
If you are an employer or employee in need of advice on employment matters such as dismissal, redundancy, contracts or anything else then please contact our expert employment lawyer Umberto Vietri of Skipton and Keighley based solicitors AWB Charlesworth.
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