What can an employer legally deduct?

Employers can make deductions from wages on account of a worker’s “conduct, or any other event, where the worker is contractually liable” without infringing NMW law (regulation 12(2)(a) NMWR), “Any other event” here means something for which the worker is “responsible”, for example, fees for training that the employee might have to pay back if the agreement with the employer is not fulfilled.

Deductions to repay an advance under a written agreement for a loan (such as a season ticket loan) or a wage advance, or as a result of an accidental overpayment of wages, can be made without infringing NMW law. There must be proper supporting paperwork and payroll entries showing a genuine loan or advance and that the worker has received the money (or that it has been paid to a third party).

Payments under the Coronavirus Job Retention Scheme to shorter-hours or furloughed workers do not breach the NMW, even if, as a result of paying workers 80% of their normal wages, the average hourly rate falls below the NMW for the worker’s age. However, furloughed apprentices must continue to be paid at least the appropriate minimum wage for all time spent training while furloughed.