Unlawful deduction of wages

If your employer has not paid you or they have paid you less than you are owed, you may be entitled to make a claim for unlawful deductions from wages. Our solicitors can explain your rights to you and help you to decide what action to take to recover your money.

Can an employer make deductions from wages without your consent?

The Employment Rights Act 1996 protects you from unlawful deductions from wages.

Your employer must have written consent to make deductions from your wages unless it is a lawful deduction as follows:

  • Your employment contract allows the deduction.
  • You have been overpaid by mistake.
  • You have taken part in a strike or industrial action.
  • It is a legal requirement. For example, income tax, National Insurance, student loan repayment or a court order.

Your employer should inform you if they are going to make a deduction from your pay that you may not expect.

Can your employer withhold pay?

An employer can only withhold pay if it is classed as a ‘lawful deduction’ as listed above.

What are your rights if you are underpaid?

If you have been underpaid due to an unlawful deduction from your wages, then you are protected under the Employment Rights Act 1996.

Underpayment of wages is classed as an ‘unlawful deduction’.

What can you do about unlawful deductions from wages?

The first step is to bring the deduction to your employer’s attention and to try to resolve the matter with them informally. If that does not work, raise the issue formally, in writing, through your employer’s grievance procedure.

If you do not achieve a satisfactory outcome, register your claim for unlawful deduction of wages with ACAS (Advisory, Conciliation and Arbitration Service). It is important to act as quickly as possible because you have just six months less one day of the unlawful deduction to register with ACAS.

Where there has been a series of underpayments, the time limit begins from the date the last deduction was made.

When ACAS cannot settle your claim with your employer, your case can be referred to an employment tribunal where an employment judge will decide the outcome.

Have a question or need some help?

Legal advice about unlawful deductions

Our employment law solicitors have years of experience in helping employees to make claims for unlawful deduction of wages. We understand that underpayment or non-payment of wages can have severe consequences for employees, and you have the right to be paid correctly.

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Unlawful deduction of wages FAQs

Is it illegal for an employer to pay you late?

If your employer fails to pay you on the dates agreed in your employment contract, they are in breach of contract, whereby late payment is illegal.

Late payment can be classified as an unlawful deduction of wages, and it could also amount to constructive dismissal if it causes you to leave your job.

Are you under obligation to pay back an overpayment?

If your employer has made an overpayment in error, you are under obligation to pay it back. The Employment Rights Act 1996 allows an employer to make deductions from your wages without your permission in this instance.

When an employee has left a company and they refuse to pay back the money, their ex-employer could bring a civil claim against them.

Is there a time limit to claim unlawful deduction of wages?

If you have missed the 6-month time limit to take your unlawful deduction claim to an employment tribunal, you can refer it to the County court instead.

Since underpayment of wages is considered a breach of contract whereby you have up to 6 years to make a claim through the County court.

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