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How to make your employees pay up when you've suffered financial losses

by , 05 March 2013
We often receive questions to our Labour Helpdesk about when and how you can deduct money from employee's salaries to reclaim losses. Most employer's don't know when they're allowed to deduct money from employee's salaries, and more importantly, how to do it legally.

Keep reading to find out how...


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Here's how and when you can make your employees pay up…

The most important thing is that you've got to get your employees written consent to dock his pay. You can get this by:

1. Having it in the initial employment contract
Write a clause in your initial employment contract stating that if the employee ever causes a loss or
damage in the course of his job, then you've got the right to reclaim the losses from his salary.

But you're only allowed to deduct a quarter of the worker's pay at a time, which means you can't take off all the money at once.

2. As an addendum to the original employment contract
If your employees have been working with you for a while you can get them to sign an addendum to their original contracts. You'd also need to get any temporary employees to sign these contracts.

There are circumstances when you don't need written consent…    

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5 Exceptions to the rule of written consent

In these five instances, your employee's written consent isn't required and you can go ahead and deduct the money:
  • You accidently over pay him;
  • He pays union fees;
  • Deductions required by law: UIF and tax;
  • A deduction authorised by an arbitration award or court order e.g. a garnishee order for child maintenance; and
  • You've proven he owes you for loss or theft but he refuses to give his written consent to the deductions from his pay.

Now you can reclaim your losses legally!

Until next time,

Taryn Strugnell

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